Homegrown women’s handbag brand Baggit is planning to re-enter international markets like the USA, UK, Australia, and GCC region through strategic local partnerships, and by leveraging international marketplaces like Amazon, Nina Lekhi, MD and & chief design curator, Baggit told ETRetail.
Before COVID, the brand was selling via an exclusive arrangement with a distributor in South Asian countries like Bangladesh, Nepal, and Sri Lanka, as well as in the Gulf. This arrangement expired during COVID and the brand did not try to renew it as it was restricting it to selling through other distributors.
“Now, we are re-entering the Gulf region through a non-exclusive arrangement. Unlike earlier, this time we will begin with our online operations and then open offline stores. We are expected to complete the first phase of expansion by the end of this fiscal year. And then we will keep on expanding to 4-5 new markets every year,” she asserted.
In India, the brand invests about 10 per cent of its turnover in creating awareness as well as desire, however, for the foreign markets, it has kept a cap of about 25 per cent.
Apart from this, the brand invested Rs 5 crore to open its manufacturing unit at Bhiwandi last fiscal. It spreads across 40,000 sq ft and has a capacity of 80,000 bags per month.
“We only manufacture premium products at our manufacturing unit. Currently, only 50 per cent of the capacity has been utilised. In the next financial year, we will be further investing Rs 4-5 crore to expand its capacity,” she stated.
“Along with this, next financial year, we are also planning to go omnichannel,” she further added.
The brand, which currently boasts of 101 stores across India, plans to open 60 more by this fiscal end. Going ahead, it plans to focus more on tier II and beyond cities.
At present, 60 per cent of the stores of the brand are in metro and tier I cities and the remaining 40 per cent are in tier II and beyond cities.
“Out of the 101 stores we operate, 67 stores are run by franchise partners, and the remaining 34 stores are company-owned and company-operated. Going ahead, we plan to operate all the new 60 stores with franchise partners,” she explained.
Apart from this, the brand also has a presence in 300 shop-in-shops.
For franchise partners, the initial investment to open a store of Baggit stands at Rs 15-20 lakh.
Currently, offline contributes 60 per cent of the revenue of the brand, and online contributes the remaining 40 per cent.
Along with handbags and wallets, the brand has also forayed into other categories like trolley bags, backpacks, and cabin bags.
“We’re also looking at doing jewelry and footwear in the next two months in a few select stores. So, we plan to convert Baggit from a women’s handbag brand to a complete lifestyle retail brand for women,” she asserted.
“In September, we will be introducing a new brand Maatii offering upcycled products and this will only be available at our 150 retail touchpoints like our company-owned and company-operated stores and top-door shop-in-shops,” she further added.
The brand, which clocked a Rs 170 crore turnover in FY 22-23, registered a 25 per cent drop in turnover in FY 23-24.
“It happened for two reasons. One is that there was an inventory buildup in the previous year and we had to liquidate the inventory at comparatively low prices and the second reason was that consumer sentiment was not very high in the fashion segment,” she explained.
This fiscal, it is eyeing to match its FY 22-23 turnover.
