An edited version of this story first appeared in DNA Money edition on Wednesady, August 22, 2012.
Every inch of 5aSec, an 800-square-feet fabric care store — or the so-called “super premium laundry” — at upmarket Pali Naka, a busy junction in Mumbai’s posh suburb Bandra, buzzes with action. In a section just behind the apparel ironing area, a female employee is seen treating a garment with some nifty hand-held equipment.
“It’s a laser gun. We use it to remove stubborn stains. Hi-tech processes like this mark our entire fabric-care approach. They make the garment look brand new,” says Suresh D Bhatia, MD of SB FabCare which operates 5aSec, the French textile care brand.
Bhatia is the Indian master franchisee of 5aSec which has three stores in India. Launched 18 months ago in Mumbai, 5aSec is among the new breed of fabric care stores like Pressto, Fabric Spa and Wardrobe that cater to the emerging affluent and aspirational Indian households. Dubbed as textile experts, these players offer consistent quality and service through clearly defined processes and systems supported by latest proprietary technology, state-of-the-art machinery, world class cleaning products and, highly skilled / trained manpower.
But, why do we really need such specialised laundry service providers charging a huge premium over the 25,000-odd small laundries and dry cleaners in India? The answer is very simple. A highly expensive garment / designer wear needs special attention when cleaning to ensure its characteristics remain intact and there is no damage to the fabric or other special material being used to make it.
A Jyothy Labs’ consumer research on the kind of laundry services availed by Indian households clearly brings out three key aspects. Firstly, easy wash items that can be washed at home. Second, items that were difficult to wash at home like bed covers, pillow covers, quilts, blankets, curtains etc; and finally premium garments like expensive sarees, suits, embroidered / designer apparels, leather garments and accessories like handbags, soft toys, shoes etc which cannot be washed at home at all and had to be given to dry cleaner / specialist laundry operator.
“The second and third categories are where households expressed concerns on the quality of the service provider and whether their garments, home linen would be safe if given to them for washing / cleaning / treating etc. We asked the consumer, what kind of a laundry they’d expect and everyone said they would prefer an expert for such set of apparels,” said Ullas Kamath, joint managing director, Jyothy Laboratories Ltd (operators of the Fabric Spa chain).
As experts always come at a price, these stores had to be positioned at the premium price bracket. For instance, if the dhobi / dry cleaner would charge anywhere between Rs 15-40 for a shirt, the specialised fabric care operators would charge a little over Rs 100 for the same shirt mainly because of the processes they employ.
“The pricing (wash cost) mechanism followed worldwide is cost of the garment divided by 10 or 15 but in India it is cost divided by 40. So if you have a saree costing Rs 40,000 the wash cost would be anything in the range Rs 1,000 to Rs 1,500 but if the saree is priced at Rs 1,000 the wash cost will be Rs 150-odd,” said Kamath.
While the fabric care industry started taking shape in 2008, industry experts believe it will eventually become the next coffee chain story of India. And with more and more Indians taking fancy to global premium and luxury brands like Louis Vuitton, Gucci, Armani, Jimmy Choo, Canali, Burberry etc, the demand for such service providers is expected to increase significantly.
“Spending power, emergence of an affluent middle class with 10-100 million households, increasing presence / penetration of premium and luxury apparel brands are fuelling this growth,” said Esther Lennaerts, executive chairperson, Pressto Dry Cleaning & Laundry Pvt ltd, which operates a chain fabric care stores under the Pressto banner.
Initial indicators, by existing operators, peg the growth at 20-30% annually. While setting up a store would cost upwards of a couple of crore the breakeven happens within 12-16 months and in some cases even sooner depending on the locality and the volumes being handled. The usage pattern differs from one household to another wherein some may use the services just 2-3 times in a quarter while a lot of others would avail the services 2-3 times in a week. As for margins are concerned, this business offers gross margins of 50% while net margin is around 20%.
Catering to the increasing demand, Pressto has in the last three years, grown from 5 to 21 stores and is targeting to reach over 100 stores within a couple of years from now. SB FabCare (5aSec) on its part is gradually increasing its presence and will be looking at the franchise route for further store additions going forward. The market leader with 132 fabric-care outlets, Jyothy Fabricare has set a goal of reaching 500 stores by 2015.
Every inch of 5aSec, an 800-square-feet fabric care store — or the so-called “super premium laundry” — at upmarket Pali Naka, a busy junction in Mumbai’s posh suburb Bandra, buzzes with action. In a section just behind the apparel ironing area, a female employee is seen treating a garment with some nifty hand-held equipment.
“It’s a laser gun. We use it to remove stubborn stains. Hi-tech processes like this mark our entire fabric-care approach. They make the garment look brand new,” says Suresh D Bhatia, MD of SB FabCare which operates 5aSec, the French textile care brand.
Bhatia is the Indian master franchisee of 5aSec which has three stores in India. Launched 18 months ago in Mumbai, 5aSec is among the new breed of fabric care stores like Pressto, Fabric Spa and Wardrobe that cater to the emerging affluent and aspirational Indian households. Dubbed as textile experts, these players offer consistent quality and service through clearly defined processes and systems supported by latest proprietary technology, state-of-the-art machinery, world class cleaning products and, highly skilled / trained manpower.
But, why do we really need such specialised laundry service providers charging a huge premium over the 25,000-odd small laundries and dry cleaners in India? The answer is very simple. A highly expensive garment / designer wear needs special attention when cleaning to ensure its characteristics remain intact and there is no damage to the fabric or other special material being used to make it.
A Jyothy Labs’ consumer research on the kind of laundry services availed by Indian households clearly brings out three key aspects. Firstly, easy wash items that can be washed at home. Second, items that were difficult to wash at home like bed covers, pillow covers, quilts, blankets, curtains etc; and finally premium garments like expensive sarees, suits, embroidered / designer apparels, leather garments and accessories like handbags, soft toys, shoes etc which cannot be washed at home at all and had to be given to dry cleaner / specialist laundry operator.
“The second and third categories are where households expressed concerns on the quality of the service provider and whether their garments, home linen would be safe if given to them for washing / cleaning / treating etc. We asked the consumer, what kind of a laundry they’d expect and everyone said they would prefer an expert for such set of apparels,” said Ullas Kamath, joint managing director, Jyothy Laboratories Ltd (operators of the Fabric Spa chain).
As experts always come at a price, these stores had to be positioned at the premium price bracket. For instance, if the dhobi / dry cleaner would charge anywhere between Rs 15-40 for a shirt, the specialised fabric care operators would charge a little over Rs 100 for the same shirt mainly because of the processes they employ.
“The pricing (wash cost) mechanism followed worldwide is cost of the garment divided by 10 or 15 but in India it is cost divided by 40. So if you have a saree costing Rs 40,000 the wash cost would be anything in the range Rs 1,000 to Rs 1,500 but if the saree is priced at Rs 1,000 the wash cost will be Rs 150-odd,” said Kamath.
While the fabric care industry started taking shape in 2008, industry experts believe it will eventually become the next coffee chain story of India. And with more and more Indians taking fancy to global premium and luxury brands like Louis Vuitton, Gucci, Armani, Jimmy Choo, Canali, Burberry etc, the demand for such service providers is expected to increase significantly.
“Spending power, emergence of an affluent middle class with 10-100 million households, increasing presence / penetration of premium and luxury apparel brands are fuelling this growth,” said Esther Lennaerts, executive chairperson, Pressto Dry Cleaning & Laundry Pvt ltd, which operates a chain fabric care stores under the Pressto banner.
Initial indicators, by existing operators, peg the growth at 20-30% annually. While setting up a store would cost upwards of a couple of crore the breakeven happens within 12-16 months and in some cases even sooner depending on the locality and the volumes being handled. The usage pattern differs from one household to another wherein some may use the services just 2-3 times in a quarter while a lot of others would avail the services 2-3 times in a week. As for margins are concerned, this business offers gross margins of 50% while net margin is around 20%.
Catering to the increasing demand, Pressto has in the last three years, grown from 5 to 21 stores and is targeting to reach over 100 stores within a couple of years from now. SB FabCare (5aSec) on its part is gradually increasing its presence and will be looking at the franchise route for further store additions going forward. The market leader with 132 fabric-care outlets, Jyothy Fabricare has set a goal of reaching 500 stores by 2015.
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