Discount chain to up warehousing biz

With its eyes on the ready-to-wear market that is growing around 20 per cent per annum, the Mumbai-based The Loot India Pvt Ltd which is a multi-brand discount chain, has readied plans to expand its warehousing operations. The company presently has 30 stores mostly located in North India, and is now looking to ramp up this number to 400 in two years.

This three-year-old firm, which has a warehouse in Mumbai with a carpet area of 120,000 sq ft, will increase its stock capacity from the present 1 million pieces to 4 million pieces in the next two years.

Entrepreneur Jay Mehta, who had worked with Color Plus, Adidas and Weekender to expand their franchisee, claims to offer discounts in the range of 25-60 per cent on garments, footwear and fashion accessories through The Loot chain conceptualised by him.

"We buy apparels and footwear in large quantities from various brands, stock the merchandise in the warehouse and sell them to customers at discounted prices. We do not pick up defective or seconds stocks from factories, but excess stocks," Mehta said.

The Loot chain retails international brands like Kappa, Bossini, Adidas, Nike, CAT, ID, Spykar, Lilliput, Giny & Jony, Disney, Ruff Kids, Lee Youth, Puma, Reebok, Fila, Umbro, Van Heusen, Allen Solly, Arrow, Lee, Lee Cooper, Wrangler, Pepe Jeans, Banana Republic, GAP, Old Navy and Mercedes.

"We plan to increase the number of stores to 100 by 2009-end. Of these, some 10 will be located in Banglore. We propose to pump in Rs 100 crore over the next 13 months," Mehta said. Funds will be sourced from banks and internal accruals, he said, while outlining the company's plans to enter the capital market in 18 months.

Claiming a growth rate of 85 per cent in the last three years, Mehta said the company expects to post a turnover of Rs 60 crore by March 2008 and Rs 120 crore by 2009. "We have studied the market and only 45 per cent of branded goods are sold at discounted prices. There are not many big players in the organised sector and plan to open more stores in the tier-II cities to cash in on the increasing demand for branded goods there," Mehta added.