Finding his feet in retail

Inder Dev Singh Musafir of M&B Footwear is all set to open an all-India chain of stores for branded shoes.

Business World - Feb-2007 [page-70]

Inder Dev Singh Musafir may have taken his poet and politician grandfather’s pen name as his surname, but he has gone down a very different path. Educated and trained in the shoes business in England, he has built M&B Footwear, a casual footwear company, from scratch to Rs 100 crore turnover in 14 years. Now, he aims to take his company to the next level by building an exclusive retailing network for M&B products. “Our focus area is the segment of footwear for Rs 1,000 and above, which is currently only a Rs 250-crore market (3.1 per cent of the overall footwear market), but is ready for rapid growth,” he says, adding, “Branding is due to become a big factor in footwear business.”

Musafir wants to reduce the dependence on margin-sapping trade to 25 per cent in four years from the present 65 per cent and raise revenues from M&B’s own retail stores to 75 per cent.

To meet this target, he is rolling out his own retail network, which is a combination of his own stores, branded as M&B Walk In, a chain of seconds stores —M&B Factory Direct— and shop-in-shop outlets in other large stores such as Westside, Pyramid and Shoppers’ Stop. To make exclusive retailing feasible, he is also building a portfolio of brands.

Best FOOT forward

Five-pronged strategy for growth

  • License known brands for manufacture and distribution.
  • Import low-end shoes and brand them.
  • Set up own retail chain for regular and discounted products, in addition to distribution through trade channels.
  • Buy shops in malls and on high street, and let others operate the stores on revenue-sharing basis.
  • Ride piggyback on large retail chains by setting up ‘shop-in-ship’ on revenue-sharing basis.

Since mid-2005, he has put together a network of 22 M&B Walk In shops, 32 M&B Factory Direct outlets and five shop-in-shop stores. His target is to have a total of 125 Walk In and shop-in-shop and 100 discount stores by 2010.

Interestingly, Musafir does not staff and operate his Walk In stores. Instead, he stocks the stores and gives them to others to staff and operate on a revenue-sharing basis. Similarly, his shop-in-shop deals involve retailing M&B brands in exclusive zones on a revenue-sharing basis.
“I expect the big retail chains to grow fast and I am tying up with them to grow,” he says.

For a long period, from 1995 to 2005, Musafir dealt with only Lee Cooper. Now, he has expanded his portfolio to include five more brands — Rider, Geox, Provogue (licensed brands), and ID and Firangi (own brands). He also plans to sign up more brands to widen M&B’s offering. M&B’s six brands straddle a broad price range of Rs 500 to Rs 9,000. Today, Lee Cooper contributes only 40 per cent of the company’s revenues while ID is the second largest contributor with 15 per cent.

Musafir acknowledges that he needs more money to implement his strategy, and he is willing to offer up to 15 per cent of his company to a large retail chain that will also buy his merchandise. “Tying one’s fortune with a giant retailer is like buying an insurance policy and growth fund combo,” he quips.[ http://www.businessworld.in/content/view/669/720/]