This story first appeared in DNA Money edition on Wednesday August 1, 2012.
Jyothy Fabricare Services Ltd, India’s biggest laundry chain operator that runs 132 garment-care outlets, has set a goal of reaching Rs 300 crore in turnover by 2015 from the Rs 100 crore expected this fiscal. The subsidiary of FMCG firm Jyothy Laboratories Ltd said it currently services over 150,000 households and is looking to increase it to 1 million households by 2015.
Ullas Kamath, joint managing director, Jyothy Labs, said the turnover target will be achieved on the back of an aggressive retail expansion plan and high volume institutional business.
“We will have at least 200 outlets on our own. New stores beyond that will be franchisees. The target is to have 500 stores by 2015 under Fabric Spa (for premium catchments) and Wardrobe (for sub-premium -- SEC B and C) brands,” he said.
Jyothy Fabricare Services Ltd, India’s biggest laundry chain operator that runs 132 garment-care outlets, has set a goal of reaching Rs 300 crore in turnover by 2015 from the Rs 100 crore expected this fiscal. The subsidiary of FMCG firm Jyothy Laboratories Ltd said it currently services over 150,000 households and is looking to increase it to 1 million households by 2015.
Ullas Kamath, joint managing director, Jyothy Labs, said the turnover target will be achieved on the back of an aggressive retail expansion plan and high volume institutional business.
“We will have at least 200 outlets on our own. New stores beyond that will be franchisees. The target is to have 500 stores by 2015 under Fabric Spa (for premium catchments) and Wardrobe (for sub-premium -- SEC B and C) brands,” he said.
The company will start appointing franchisees from the next fiscal from Mumbai and Pune, which it believes hold good potential.
Laundry business in India is predominantly an unorganised sector, providing huge opportunity to organised players. According to an Insead and KPMG report, the laundry services market in India is expected to grow manifold from current size of over Rs 5,200 crore.
“We will incur a capital expenditure of around Rs 40 crore this fiscal and are targeting a turnover Rs 100 crore. Over the next two years, we will take the turnover to Rs 300 crore by 2015. It is a doable figure because the market is very big and there is enough space for players to build their business,” said Kamath, adding the business has been planned based on the private equity investment received in 2010 and any future requirements will be met through internal funds.
Jyothy Labs holds 75% stake in the Jyothy Fabricare with the balance 25% being acquired by IL&FS Private Equity for Rs 100 crore in 2010.
The laundry firm, which was started in 2009, is looking to target the entire garment care market from retail, premium, sub-premium, institutional and Railways.
Despite significant presence in the country, the laundry firm has chosen not appoint franchisees as yet. Kamath said it can be done after credibility is established and the brand is in the market for 3-4 years. “That’s when we will get a clear picture of how much money can be made. Thereafter, franchising mode will be adopted because we will be then in a position to demonstrate the business opportunity to potential franchisees,” he said.
The company is also expecting a good inflow of institutional business from various markets in the country. It caters to the institutional market selectively, focusing on good pay masters such as five-star hotels and airlines.
“A decent volume of business is coming from the 27-odd trains out of Bangalore that are being serviced by us. Another build-own-operate-transfer contract has been received from Railways in Ahmedabad for about 15 tonne capacity for 10 years. We have bagged a similar contract from Delhi International Airport Ltd for 15 years,” said Kamath.
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