Furniture e-tailer Pepperfry would soon launch its furniture studios in the offline space under the franchise model, Ashish Shah, founder and COO, Pepperfry told FE. This is a departure from the company’s earlier practise of launching such studios under its ownership. Such studios function as an experience stores to give customers touch and feel of the product and not point of sale. It has 16 such studios which are owned by it and another 32 would be launched under the franchise model taking the total to 48 across 15 cities from the current 9. Some of the new cities where the studios would be opened are Chandigarh, Kochi, Goa, Lucknow, and Indore.
Pepperfry will be following the franchise route to speed-up execution in setting up the studios. Through franchise Pepperfry seeks to rope in entrepreneurs and merge its capabilities, and get access to additional investment in stores via strategic partnership. Under this model, Pepperfry will be shelling out commission in the range of 5-10% to these partners.
The company has already invested around `40-70 lakh for setting up each of its store and spends about `4-7 lakh every month on their operations. In FY18, the company would invest around `19-20 crore towards setting up the new 32 stores. The spend would have been higher but for the franchise model.Meanwhile, Urban Ladder, Pepperfry’s closest competitor is awaiting government’s approval for opening its single brand retail stores.
Pepperfry manages its own fleet of delivery with 380 trucks and 16 distribution centres. During FY17 it reduced the cost of per delivery to `380 from `600, a year before. It also reduced the delivery time to 9 days from 17 days across 500 cities, said Shah.In an earlier interview to FE, Shah shared that Pepperfry earns a commission of about 35% on every order from its merchant and its has gone up by almost 4% since last year. In FY16, the company’s net loss stood at `155 crore on a revenue of `98 crore.