As part of overall explansion plans, Jyothy Fabricare Services (JFSL), a subsidiary of Jyothy Labaratories (JLL), is eying two acquisitions, one each in Mumbai and Delhi. The acquisitions, of two laundry chains, will be completed shortly, adding close to 70 outlets to JFSL’s current 30, persons in the know said.
A JLL company spokesperson confirmed the news. The names of the two targets, however, could not be ascertained at the time of going to press.
The Mumbai chain, according to sources, has five to six outlets, while the Delhi chain has around 60. The acquisitions are likely to cost JFSL under Rs 50 crore.
To finance the acquisitions and its overall expansion plans, JFSL is in the process of raising Rs 100 crore by offloading 26 per cent stake to the private equity arm of financial major IL&FS. The deal values JFSL at close to Rs 400 crore.
JFSL was set up in November 2009 with an initial capital expenditure of Rs 35 crore. It is into both premium and affordable laundry services under brands named Snoways, FabricSpa, Busy Easy, etc. Based in Bangalore, where it has a unit for cleaning garments, the acquisitions will take its overall presence to three cities.
The company proposes to add another three cities to its list in the near future — Pune, Hyderabad and Chennai. It intends in these three to set up operations on its own, rather than make acquisitions. The eventual plan is to achieve a turnover of Rs 300 crore in five years, a jump of 30 times over its current figure. The total number of outlets by then is to be 500.
The model to be adopted in each city where it goes will be that of hub and spoke — a central unit for cleaning garments, linked to collection and delivery centres.
JFSL also proposes to use fabric care products produced by Jyothy rather than use imported products as it now does, to bring down costs.
Though the annual market for laundry services is pegged at Rs 5,200 crore by KPMG, it is largely unorganised in India. Organised players are slowly but steadily stepping in, such as Jyothy and Presto. The latter is a Spanish chain with 800 outlets in 20 cities worldwide.
