The company, which largely has a presence in North India, plans to head South later
Lakhani Infinity Footcare, which owns and markets footwear under the ‘Lakhani’ brand, plans to expand into West Bengal and later into the Southern states. The company will initially target Tier-II markets.
Lakhani is a 55-year-old homegrown brand, but its presence has mostly been in the Hindi heartland, in Rajasthan, Haryana, Jammu & Kashmir, Uttar Pradesh and Madhya Pradesh. In the west, it has a presence in Maharashtra and in the South, it has “some presence” in Hyderabad.
According to Mayank Lakhani, Director, Lakhani Infinity Footcare, the expansion plans have been put in motion after the rollout of GST. The new tax regime has brought in a single tax structure pan-India, helping it frame expansion plans. Moreover, unorganised players are now either exiting the market or are unable to compete with organised ones.
Expansion will see the company set up super distributors (called ‘depots’, in their parlance) who, in turn, will sell to retailers.
“As of now we will expand into West Bengal in FY21, specifically targeting Tier-II markets. Depots will also come up in West Bengal to reach out to other parts of the East; whereas another will come up in Hyderabad, where we have some presence; thereby enabling us to access the South Indian markets better,” he told BusinessLine.
“GST brought in a single tax regime, thereby enabling us to focus on pan-India expansion plans. Otherwise, different tax structures across States under the older VAT regime made things difficult for smaller organised players,” Mayank Lakhani added.
Lakhani Infinity Footcare reported a turnover of ₹105 crore in FY19 and is EBITDA positive. It is planning to close the current fiscal year at around ₹160-165 crore in FY20 and ₹220 crore for FY21.
The target, Mayank Lakhani says, is to achieve a ₹400 crore turnover, over the next 4-6 years.
According to him, the brand has a strong presence in Tier-II markets, with average prices varying between ₹499 and ₹1,499. Nearly, 70-80 per cent of its turnover is from men’s footwear. The focus will continue to be on these markets initially. “We may explore Tier-I and metro markets after we achieve our ₹400 crore turnover target,” he added.
Lakhani currently has a manufacturing facility at Sahibabad in Uttar Pradesh, with the capacity to produce 30,000 slippers in a day. This apart, it has tie-ups for third-party manufacturing.