In an interaction with Abhinav Kumar, CEO of Brand Concepts Ltd

We are still quite under-penetrated in terms of our stores, hence our focus is to increase the store footprint to become more accessible to our consumers, asserts Abhinav Kumar, CEO of Brand Concepts Ltd.

In Q3FY23, Brand Concept's net sales registered a 69.7 per cent YoY growth while the net profitability shot up by more than 98 per cent. What were the factors which led to such healthy growth?

Multiple factors have led to this kind of healthy growth:

 Ø There is an overall increase in the category business, as the travel industry is witnessing one of the highest growth rates today. During the year there was a major positive uptick in the overall industry structure. With this increase, consumers are also aspiring for more fashionable products and brands. This trend has benefited us, as we endeavour to bring fashion into our focus category through a portfolio of brands.

Ø For a company like us, in terms of our footprint, we are still quite young. We have several opportunities to grow by way of increasing our reach and footprint in various markets. Hence the main focus of the company during the year is to increase the number of stores, increase the number of distributors & dealers, and reach areas which are still untouched and has a great market scope to serve the consumer’s sentiments. Overall, till date the company has shown a significant increase in turnover and overall growth as a whole

While we spotted the positive trend early on, the supply chain was one of the biggest concerns in light of the disruption in China manufacturing. Hence this year Sourcing played a very vital role and supported a lot in this achievement. The situation with China poses a threat to the cost structure for adequate supplies. The company, to reduce the cost of imports and to have better sourcing, is working on shifting its supply chain dependency away from International Markets to the domestic market for its products, and soon will work on creating a model towards its manufacturing.

The culmination of all of this is the growth that you see in both external and internal factors.

What is your segment-wise revenue mix and how do you expect it to evolve over the next 2-3 years? What are your key growth triggers?

While we don't have a different identifiable segment, our sales strategy can be broadly classified into the following 2 strategies:

Ø We term one as the Digital segment or the E-commerce segment, which is the online segment. In this category, we have B-2-B as well as B-2-C.

· B-2-B: We sell directly to E-commerce (Amazon/Flipkart) and they sell to the consumers. 

· B-2-C: Where we sell our products through their platform as a marketplace.  

Ø The other is the off-line segment 

We were early adopters of the digital, we understood that digital is here to stay hence we adopted quite early the entire channel strategy, and hence today if you see 50 per cent of our business is coming from the entire online or digital market. Where the good part is that our marketplace, our own B-2-C business is starting now to reach a level of 25-30 per cent of our overall online sales, which is a very healthy sign for us. 

In terms of offline: We have a widespread presence across our EBO stores: 

· EBOs contribute about 8-10 per cent of our sales. 

· LFS, which are your department stores, contribute good around 16-17 per cent of our business

· Dealer and Distribution, which contributes around 17-19 per cent of our business

· Sales from Licensor Flagship Stores contribute 8-9 per cent.

We believe that we are still quite under-penetrated in terms of our stores, as we just have reached 30-32 in numbers hence our focus is to increase the store footprint to become more accessible to our consumers. 

Apart from our stores, the focus for growth will also be towards opening more & more shop-in-shops in key department stores as well as dealer stores across the country.

Can you shed some light on the biggest challenges you are currently facing?

The biggest challenge today is a lack of quality premium retail spaces. We have very few premium quality retail spaces available across the country and wherever it is available it has very high demand & high premium while the waiting period is also very long in all the top retail spaces in the country today. That is one of the main challenges.

The second is the supply chain. While the supply of leather goods in the country is robust and available; when it comes to Indian travel gear and Women’s handbags - the supply chain is still heavily dependent on China. India still has limitations in terms of manufacturing. These are the two most important and biggest challenges we currently face in our business.  

Presently, what are your top 3 strategic priorities?

Our top three priorities would be:

1. We continue to add more brands to our portfolio so that we truly become a house of brands. We have recently signed up United Colours of Benetton (UCB) over and above existing licensee brands namely Tommy Hilfiger and Aeropostale. We also have 2 in-house brands namely Sugarush and Vertical.

2. We have streamlined our supply chain specifically in terms of categories that were dependent on imports. Hence we reduced our dependency on China and shifted the focus to sourcing from the Domestic Market. 

3. To increase our retail and distribution footprint in the country.