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Require funding for a fashion business with a unique distribution model.

Hi,

I quit my job last December and since then have been working with an ex-colleague on a concept in the fashion business.

The segment that we are targeting is relatively niche but still large – Rs. 2000 crores plus annually. Currently this segment is serviced by serviced by local and regional players and is very fragmented and unorganized. Hence, there is space for a national brand in this space.

Between the two of us we have close to 18 years in the fashion business and we realized the single biggest problem of the fashion business in India. Fashion is probably one of the few businesses in India where the distribution cost (35% plus) is more than the product cost (28% – 33%). This is why the fashion business is a very tough business with very few profitable brands and retailers. The best performing brands have a Net margin of 6-8%. Hence we have completely reimagined our  distribution model and are attempting 2-3 distribution concepts which to our knowledge have never been attempted in India in any meaningful way.

Over the last 10 months we have completed all the pre-launch work that is necessary to launch a brand. So we are done with our market research, product design, product sampling and distribution tie-ups. As on date we have in-principle distribution tie-ups with over 25 Points Of Sale (POS) across the metros.

Please find attached a fairly detailed presentation on our concept. Should give interested folks a fair idea of our concept, consumer, market, opportunity and our differentiators.

Now all we need is for believers to put in the funding so that we can validate our concept and get to the proof of concept stage.

Ready to talk. Give me a shout.

Cheers,

Kaushal

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4 Comments

  1. Kaushal, in my humble experience, the best people to talk to would be investors in this genre. I dont know if you would be interested in connecting with Future Capital (Biyani).

    Usually, most investors in India – angel, start up and VC have lots of knowledge about tech, and digital Internet media plays and hence listen to ideas. Also, Internet provides infinit scalability – which excites investors.

    I would recommend a focussed approach in meeting investors who understand this domain.

    Are there any folks specifically I can help you with?

  2. Your top level makes sense. If your market is domestic there are few people you can talk to as the market is very fragmented. As someone whose business model is getting the garment manufacturers to invest in our product to reduce cost on the production side i see your problem. margins in fashion are not bad if you figure out your cost.

  3. Kaushal, your concept addresses a large opportunity. And your team has got the relevant experience for this venture. 

    However, at this stage of the venture, a Rs.5 cr ask is a lot.

    You may want to consider raising a smaller round that will be enough to prove the concept, and your implementation capabilities, in the market and then go and raise a larger round for expansion. 

    In India, Rs.5 cr rounds will typically happen for post concept and growth-stage companies.

    All the best with your venture. 

  4. @Prajakt: It was indeed a great plan but I think he started Le Mode Fashions Pvt. Ltd and then it shutdown in 2010 end. Later on took the job in HP, Bangalore. Just checked FB and linkedin so information might not be so accurate

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