We plan to open 100 more stores: Shreeleathers
Synopsis
Sreeleathers, the value-for money shoe brand that owns the world’s largest single-brand shoe store in Kolkata, plans to open 100 stores across the country over the next two years.
By Writankar Mukherjee, ET Bureau
Sreeleathers, the value-for money shoe brand that owns the world’s largest single-brand shoe store in Kolkata, plans to open 100 stores across the country over the next two years. Sreeleathers is a 35-store nationwide chain doing what it set out for when freedom fighter late Suresh Chandra Dey started it in 1951 at Jamshedpur: to sell durable and affordable shoes to the common man. Its range of shoes starts from rs100 and the highest priced shoes cost just Rs799.
None of the products sold in your store bear the brand name. Why?
Our store’s name is our brand. This way (by not carrying brand name in products ), we keep our overheads down, which ultimately allows us to sell products at a price affordable for everyone. Also , this minimises the risk of fakes and copy of products. But still, we end up sending legal notices everyday to someone or the other who copies our store name.
How do you manage to keep the prices so low?
On an average, our stores have a footfall of around 10,000 customers per day, which goes up to 25,000 during the festival season. This is almost equivalent to the combined footfall of all the big shoe brand stores in cities like Kolkata. Our conversion rate is almost 80%.
Apart from not using a brand name, another factor that has kept prices down is that all our stores are located on properties owned by us. Hence, we don’t have any rent pressure, which invariably goes up when a store starts performing. It is the same reason why we don’t believe in setting up stores in malls.
At the same time, our supply chain is such that we just keep a day’s inventory. So, there are no warehousing costs. All our shoes are sourced from a pool of vendors and we don’t manufacture anything ourselves. All these factors allow us to sell products at prices, which if our competitors starts to match, they will run into heavy losses. Hence, we never run any discounts at our stores.
It is this business model which makes Sreeleathers a case study at IIM Ahmedabad and XLRI.
Since the brand has made its name, have you ever got any buyout or partnership offers?
Yes. There have been plenty of offers for partnerships, including from some of the top retailers. There have been several offers from reputed private equity firms as well, who are keen to invest. But we are old fashioned and don’t want to partner someone or let go control over our business . We have never taken any bank loan. We are a completely zero-debt company.
Would Sreeleathers continue with its value positioning, or become a lifestyle brand in sync with the changing market ?
How strong is your presence in Europe and other international markets?
We have forged a JV with Greek company Ginnes Costa for sales of shoes and accessories under the Sreeleathers brand in Europe. We supply the products from India only. Today, Sreeleathers is making a mark in countries like Germany, the UK, Greece and the Netherlands.
Wouldn’t this zero-debt strategy slow your growth? What are your expansion plans?
Our plan is to set up 100 stores in two years mainly through a mix of franchisee and company-owned outlets in big cities like Mumbai, Bangalore and Hyderabad. We have already tried the franchisee model and it is quite successful. Such a scale of growth will allow us to enjoy economies of scale in our sourcing, which will keep prices down. We are doing away with the smaller stores and all our future stores will be set up over at least 10,000 sq ft, which will allow us to display more than 3,000 SKUs. We are also looking at selling shoes over the Internet.
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Yet it’s big. The Kolkata-based company owns the country’s largest shoe store in Kolkata , North India’s largest shoe store in Delhi and South India’s largest shoe store in Chennai. The brand is now set to enter cities like Mumbai, Bangalore and Hyderabad, Sreeleathers MD and part owner SB Dey told ET’s Writankar Mukherjee in an interview. Edited excerpts:None of the products sold in your store bear the brand name. Why?
Our store’s name is our brand. This way (by not carrying brand name in products ), we keep our overheads down, which ultimately allows us to sell products at a price affordable for everyone. Also , this minimises the risk of fakes and copy of products. But still, we end up sending legal notices everyday to someone or the other who copies our store name.
How do you manage to keep the prices so low?
On an average, our stores have a footfall of around 10,000 customers per day, which goes up to 25,000 during the festival season. This is almost equivalent to the combined footfall of all the big shoe brand stores in cities like Kolkata. Our conversion rate is almost 80%.
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Apart from not using a brand name, another factor that has kept prices down is that all our stores are located on properties owned by us. Hence, we don’t have any rent pressure, which invariably goes up when a store starts performing. It is the same reason why we don’t believe in setting up stores in malls.
At the same time, our supply chain is such that we just keep a day’s inventory. So, there are no warehousing costs. All our shoes are sourced from a pool of vendors and we don’t manufacture anything ourselves. All these factors allow us to sell products at prices, which if our competitors starts to match, they will run into heavy losses. Hence, we never run any discounts at our stores.
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It is this business model which makes Sreeleathers a case study at IIM Ahmedabad and XLRI.
Since the brand has made its name, have you ever got any buyout or partnership offers?
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Yes. There have been plenty of offers for partnerships, including from some of the top retailers. There have been several offers from reputed private equity firms as well, who are keen to invest. But we are old fashioned and don’t want to partner someone or let go control over our business . We have never taken any bank loan. We are a completely zero-debt company.
Would Sreeleathers continue with its value positioning, or become a lifestyle brand in sync with the changing market ?
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We have already created a lifestyle portfolio . It is our failure that we have not able to change the consumer perception about the brand. We are working towards that by changing the look-and-feel of the stores, visual merchandising and improving the shopping experience. However, one thing I must emphasize is that lifestyle need not always be associated with price. Our highest price shoes cost only Rs799. The fact we have Sreeleathers stores in Europe is a testimony of our lifestyle products. How strong is your presence in Europe and other international markets?
We have forged a JV with Greek company Ginnes Costa for sales of shoes and accessories under the Sreeleathers brand in Europe. We supply the products from India only. Today, Sreeleathers is making a mark in countries like Germany, the UK, Greece and the Netherlands.
Wouldn’t this zero-debt strategy slow your growth? What are your expansion plans?
Our plan is to set up 100 stores in two years mainly through a mix of franchisee and company-owned outlets in big cities like Mumbai, Bangalore and Hyderabad. We have already tried the franchisee model and it is quite successful. Such a scale of growth will allow us to enjoy economies of scale in our sourcing, which will keep prices down. We are doing away with the smaller stores and all our future stores will be set up over at least 10,000 sq ft, which will allow us to display more than 3,000 SKUs. We are also looking at selling shoes over the Internet.
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