Woodland mulls changing from partnership to a corporate structure

Woodland set up its first outlet in 1992 in Delhi. Today, it is one of India’s most successful retail brands with over 600 outlets and 20 per cent of its Rs 1,200-crore turnover contributed by exports. What has remained unchanged is its organisation structure. It is still a partnership firm, arguably the only one among its peers. The Harkirat Singh and his father Avtar Singh have continued to be owners of the brand through a partnernship.

However, Woodland is now mulling a change in status. The brand is expanding overseas and needs a corporate entity. The company is talking to consultants on what sort of corporate structure would suit, says Harkirat Singh. With 80 per cent stores making profits, and turnover growing at 15 per cent a year, Woodland has sufficient internal accrual to fund the annual capex requirement of Rs 60 crore.

A partnership firm has limited access to finance, a price that it pays for exemptions from mandatory disclosures and regulatory compliance. Over the past 25 years, the retail sector has moved away from company-owned-company-operated (COCO) model to franchise stores. Woodland, on the other hand, has mostly stuck to the COCO model, with barely 10-15 franchise stores in the network.