Fastrack, the youth brand from the house of Titan, has entered the highly unorganised market of helmets. "At retail, it's a very profitable product and the margins of helmets are as good as watches," says HG Raghunath, CEO of Fastrack's watches and accessories division. Industry experts estimate margins from the sale of watches at 10 and 13 per cent, the highest in the watches and accessories division.
While high profit margins come in handy when entering a new segment, helmets is one of a line of accessories Titan is adding to its quiver. In order to reduce its dependence on its jewellery business, Titan is focusing more on the lifestyle accessories business (alongwith watches, it is the next in revenue share at 16 per cent).
"De-risking from the gold business is a choice the company has made, and in fact, Fastrack has shown us the way," Bhaskar Bhat, managing director of Titan says. Jewellery currently contributes to about 80 per cent of the company's revenue. Launched in 1998, Fastrack was spun off into an independent brand in 2005 to focus on urban youth in the age group of 15-25. Starting with a more youth-centric line of watches, the brand instructed sunglasses about 5 years back and in 2011, launched bags belts and wallets as well.
Raghunath, says, "Fastrack wants to occupy the youth's mind completely. Not only helmets, whenever they think of a watch, a bag, a belt or any other accessory they require, they should think of Fastrack."
Fastrack, which had 147 stores across the country in nine years, is now going to rapidly increase its store count in the next four months to reach 200 by March, 2014. Fastrack is evaluating many more categories that are "unorganised, under-penetrated and under-served" to launch new products. "We are evaluating many lifestyle categories but most of the development is at a very nascent stage right now. Within existing categories also, bags, for instance, we are evaluating scope to expand our offering further," Bhat says.
Its new line of helmets for men and women are priced between Rs 1,495 and Rs 3,595. The brand would go up against brands such as Steelbird and Vega. The helmet market is estimated to grow at 13-14 per cent, and would reach about Rs 1,400 crore in the next five years, from the current Rs 800 crore. Fastrack will look to rake in Rs 15 crore from the sale of 60,000 units of helmets in the first year.
Fastrack has outsourced manufacturing to Italy's AGV SpA's India arm Cyber AGV that makes helmets for Harley Davidson, Royal Enfield and Vespa, too. Fastrack, however holds control over design and marketing and says investments have been "fairly insignificant".
Titan estimates the accessories market "conservatively" at twice the size of the watch market that is currently at Rs 5,000 crores. Known for its edgy style of communication, a stark difference from its parent company Titan's, Fastrack sells over a million sunglasses and close to a million bags, belts and wallets.