The Loot, the multi-brand, discount store chain that offers leading international and national brands at massive discounts, is planning to launch an IPO. So far, The Loot has been self-funded. Going forward, the plan is to launch either an IPO or go
in for dilution of equity. By the end of 2011, a decision will be finalized. As managing director Jay Gupta puts it, “We are very clear, we want to go mass. We want to give the shares at a reasonable price for mass consumers to make money. The IPOs which are coming are not giving enough returns to investors. We are willing to give it at the best price. We want the investors to make money rather than lose it.”
The Loot is immensely popular with the bargain hunting yet trendy crowd. It offers a wide range of apparels and kidswear at 25 to 60 per cent discount. Gupta explains the concept, “Today, the discount store model does not really exist in India. In terms of number of stores, we have the highest number in the country. If there are discount stores, they are at a very small level of five or seven or ten stores. Or they give only a shop-in-shop model. We are the only model in the world as a multi-brand discount store. And the average size of a store is 1,500 to 2,000 sq ft.” They have 150 stores pan-India and by the end of 2010, are expecting to add another 50 stores, bringing the total number of retail outlets to 200. The expansion will be based around Tier II-III towns, where the returns are much better. The planned expansion will consider a combination of brand-owned and franchise outlets.
Whilst The Loot has dabbled in e-commerce, it has not found the response encouraging. That’s because its main customer base is spread across Tier II-III cities are not well exposed to the concept of online purchase. The reason for this is: problems with net accessibility and payment cards and delivery systems. Whilst the brand has its own website which offers an online store, it also has a tie-up with Rediff and e-Bay.
Having recorded a turnover of Rs 107 crores in the fiscal year ending March 2010, the next year is projecting a 50 per cent growth. Whilst they have received offers from Nepal and United Arab Emirates, the current plan is domestic expansion and establishment of The Loot style of shopping. The Loot sticks to its mass brand strategy as it marches ahead. The strategy is based on offering popular brands that after discounts is available below Rs 1,000. So a pair of denim pants can be bought for Rs 800, a shirt for Rs 600 or Rs 700, a T-shirt for Rs 200 or Rs 300. Currently, they have around 100 brands which include popular names like Levi’s, Puma, Lee, Wrangler, Reebok, Adidas and Nike.
