Boom time for Soch Apparel as it eyes becoming Rs 1000 crore brand
Bengaluru-based premium ethnic brand Soch is riding a success story as it closed last fiscal with topline revenue of Rs 401 crore, which marked a 60 per cent growth over previous year. Despite the ethnic sector facing multiple challenges, Soch Apparel surged ahead with a 9 per cent Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). Supporting the strong performance, CEO and Co-Founder Vinay Chatlani says, post-Covid consumer rebound and a robust festive period were the main drivers of their success and it helped the brand expand brick and mortar presence across the country.
The success of the expansion strategy has made Chatlani plan on expanding further in multi-brand outlets and establishing presence in large format stores next year. Online presence would continue playing a vital part and given the required support, according to Chatlani. As the brand pushes forward to join the Rs 1,000 crore brands club, the journey could possibly take the next three to four years.
Channels that made last fiscal stellar
While the direct-to-consumer channel clocked in a quarter of the overall online sales, Soch Apparel plans to make their website work harder and contribute to more than half of all online sales within the next three to four years as a part of its strategy to reach the Rs 1,000 crore mark. The brand is also relying on Indian diaspora outreach through international e-commerce to generate more online sales. Its overall online business contributed 11 per cent to its revenues and the plan is to increase it 14 to 15 per cent next year. Interestingly, omni-channel accounts for 40 per cent of the brand's e-commerce sales which means 40 per cent of online orders are fulfilled by the stores.
Soch Apparel is being sold offline across 40 large format stores and through 165 exclusive brand outlets (EBOs) across India. The expansion plan for the next fiscal is to increase its presence in an additional 45 large format stores and 25 more EBOs. According to Chatlani, the 25 EBOs would be a mix of company owned outlets and franchised ones. At present, Soch Apparel owns 55 per cent of the 165 EBOs and 45 per cent have been franchised.
Clearly, as a premium brand of ethnic wear, Soch Apparel has seen 66 per cent of its revenues being generated from metros and the remaining 34 per cent from Tier I and II towns. Almost 68 per cent of its stores are in metros and Tier I cities and the remaining 32 per cent are in Tier II and III towns. Chatlani states, being a Bengaluru-based brand, half its total revenues are from South India, with eastern India contributing 20 per cent and western and North India 15 per cent each.
Moving forward
In its expansion plan, with the next year and a half, the company would like to reach more Tier II and III towns and convert the franchised store to company-owned in the ratio 7:3. In the current scenario, its presence through EBOs is evenly split between high streets and malls, it sees high streets as the focal retail presence in coming years. Next year, Soch will launch its 5,000 sq. ft. store at an undisclosed location in a southern metro whereas presently its EBOs are not over 1,600 sq. ft. Expansion across North India will also be a priority.
Exclusively ethnic and premium, Soch Apparel has pinned its hopes on a growing consumer base who are happy to spend on such clothing beyond festive occasions.
