Archies to move away from franchisee model, set up own shops

Greeting cards and gift articles companyArchies has decided to move from the franchisee model and concentrate more on setting up its own stores.

The company is banking heavily on the promise of the mall culture and wants to set up shop in 120 cities by 2008, investing about Rs 60 crore.

Archies' executive director Vijayant Chhabra told Business Standard in Pune that the company would like to be present in as many malls as possible because of the obvious opportunities.

"The space in malls has to be booked at least a couple of years in advance. A franchisee may neither be interested in committing this much in advance nor will he have resources to do it," Chhabra said explaining the decision to reduce the focus on the franchisee channel and expand the network of company owned stores.

Chhabra added that the contribution of business by the franchisees is declining as a proportion of the company's overall earnings as they have limitations in terms of frequently changing the get up of the shops as well as expanding the range and stock of products.

Commenting on the company's sales mix, Chhabra said the contribution of gift articles to the revenues has been increasing steadily and in fact exceeded the greeting cards revenue last year.

"We expect the two to be at more or less equal levels over the years, as the cards business has now stabilised after surviving the e-greetings mania," he said.

Archies opened on Saturday its first 'shop in shop' corner for its newly launched fashion jewellery range "Stupid Cupid." This is part of the Archies Gallery but the company plans to open a stand alone Stupid Cupid outlet in Kalyani Nagar and also open another 'shop in shop' in Nucleus Mall, Chhabra said.

He said that the comany plans to open 15 outlets in 2006-07 for Stupid Cupid fashion jewellery range. Eight of these comprising six in New Delhi and two in Mumbai are operational, he said.

Chhabra said the company has booked 250 stores across the country in different locations that will come up over the next two years.

The sizes of these stores will be different according to availability and we intent to invest about Rs 60 crore at approximately Rs 25 lakh per store, he said.