'Kimaya sees a flat year of growth, but still scaling up'

Private equity funding is a buzz-word among fashion labels and houses, but Kimaya - a multi-designer fashion house, leads the fray when it attracted investment from Franklin Templeton in late 2011 of Rs. 60 crore for parting 20 per cent stake, that put the valuations of the company then at Rs 300 crore. Pradeep Hirani, Chairman, Kimaya, is gunning for growth despite last year having been difficult. Kimaya launched a new sub-brand Karmik last year that caters to affordable designer, ready-to-wear range from multiple designers. Edited excerpts from an interview to Shamni Pande.

Q. What was your growth like last year?

A. Our sales revenue for year-ended March 2013 was Rs. 75 crore and we have had a flat year thereafter as the lease for two of major stores expired. But, barring that we are scaling up and sense a lot of demand. We have launched Karmik last year that offers multiple designer labels in the relatively, affordable, ready-to-wear space.

Q. How exactly are you scaling up?

A. We already have 12 Karmik in India and one in Lahore. We are looking at an overall number of 60 stores, out of which 30 would be company-owned and the rest would be through the franchise route. However, we would consider franchising only after we have ourselves opened at least 20 stores and have enough experience to bring in franchise partners. It is important to have first-hand experience in the space. Kimaya already has 13 stores and we will take this upto 20 stores in time.

Q. Is e-commerce an option?

A. E-commerce is a necessity, not a luxury. We already have two portals, one under the kimaya.in and the other under Karmik.in. Now, we are about to launch a third portal  called designerrack.com that will offer all the deals and discounts - after all, Indians love deals and this will tap into that audience. In fact, our stores opening target is only upto 2017; after that we are looking at growing only through e-commerce. Given the real-estate costs and complications, how long can we keep opening stores? No amount will be enough to cater to the demand that is now beginning to come from tier 2 and tier 3 cities in India. We had targeted an investment of Rs. 30 crore for our e-commerce venture and we have already spent Rs. 12 crore. We will put in the balance investment over the next year or so.

Q. How will you be different in e-commerce, given that you deal with designer brands and luxury?

A. Yes, we are already incentivizing our consumers to come online and we take the product to them in a van and offer fitting and trials. We also offer a lifetime offer of dry-cleaning for the clothing that they buy. So, yes, the experience online has to live up to the space that we operate in.

Q. Any plans of going international?

A. We already have a 10-year-old Kimaya store in Dubai at the Jumeirah Beach Road. But we are not looking at anything new now. Of course, we are exploring possibilities of being present on some international fashion portals such as net-a-porter.com and secretsales.com, among others.