Pepperfry to set up 25 new stores by March
Aims to achieve profitability in next 8-10 months followed by an IPO
Hyderabad: In line with its aim towards building a large omni channel network, Pepperfry is adding several offline stores/studios across India, under its FOFO (franchise owned and franchise operated) as well as COCO (company owned company operated) model. The company targets a launch of 20 FOFO studios across tier 2 and tier 3 cities and five COCO studios in metros by March 2021.
Currently, Pepperfry has 60 studios across 20 cities in India, of which around 18 are owned and operated by franchisees. It is aiming to achieve profitability in the coming 8-10 months. Given the company’s omni-channel capabilities, proprietary big-box logistics network and product offerings, it has reached pre-lockdown sales volumes, and is optimistic about achieving this target. Once the company attains profitability, the company is aiming for an IPO.
Ashish Shah, co-founder & COO, Pepperfry told Telangana Today, “In 2012, when Ambareesh, my co-founder, and I started Pepperfry, we launched it as an online-only model. However, in a short span of time we learned that furniture is a big-ticket category which seeks an integrated customer experience, which led to the offline model in the form of studio creation.”
These studios essentially serve as offline experience centres for customers who are seeking to experience the designs, various types of furniture with different wood finishes and get an idea of the overall quality of the furniture from Pepperfry. The studios accounted for 38 per cent to Pepperfry’s business, in the pre-Covid period. With the revival in footfalls now, the studios already are contributing to 30 per cent of the business.
Strengthening network
On the expansion plan, he said, “While in the metros, we are looking to launch 4-5 flagship or COCO studios, for the tier-2 and tier-3 markets we will rely on our FOFO model to launch 20 studios by March 2021. Currently we have two studios in Hyderabad-Banjara Hills and HITEC City.”
“From the 20 FOFO Studios that we are planning to launch, we have already signed up for 13 of these in Dehradun, Shillong, Vizag, Mangalore, Jamnagar, Chennai, Udaipur, Jammu, Gwalior, Goa, Kolkata, Ranchi and Raipur, among others. Telangana is a key market for Pepperfry and we are getting more and enough partnership enquiries from top cities in the State. We will be soon closing our discussions with partners for prime locations in Warangal, Nizamabad and Karimnagar,” Shah informed.
For COCO Studios, Pepperfry roughly invests Rs 70 lakhs, which varies depending on the location, size of the studio and market rentals. The FOFO model is based on 100 per cent price parity and does not require the partner to hold product inventory, making it a mutually beneficial association. Furthermore, the franchise partners have to invest Rs 35 lakhs less capex in order to establish a studio.
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