IRN: Can you tell us about the concept of The Loot?
Jay: The Loot brings the best branded merchandise at the best possible prices in the best environment. We place equal importance on prices, comfort, and the look and feel of the store, so the customer gets the best possible experience. Our Kalyan store showcases a wide variety of merchandise from various brands under one roof. Today, we have 96 stores across 60 cities and towns.
IRN: What was the inspiration behind the concept?
Jay: The business evolved as it did, but the basic idea was to bring brands to customers at affordable prices. We have stores in tier I, II and III cities. We are interested in any city or town that has an SEC A and B population of atleast 1 lakh.
IRN: What is the business model? How are you able to sell branded merchandise at such discounts?
Jay: We purchase huge quantities upfront from the brands. Payment is in cash and we take on the risk. It is a buy and sell model, there is no consignment, no returns to vendor. It's completely on our books. So brands offer us discounts which we are able to pass on to the customer.
IRN: You sell premium brands at discounts too. Don't the brands perceive a conflict in terms of brand positioning?
Jay:Not really, because for the customer The Loot is the brand. The customer comes to our store because he or she can get various brands under one roof at discounted prices in a comfortable environment.
IRN: Do you have a barrier to entry? Can someone else enter with the same concept?
Jay: The financial commitment is the only barrier to entry. Someone who is willing to invest Rs 100 crore and take on the financial and business risk can enter this market.
IRN: Why did you choose Kalyan for your flagship store?
Jay: Kalyan satisfies all our requirements in terms of catchment area and SEC A and SEC B population (over 25 lakh) and is a fast growing market. Rentals are lower than elsewhere. Our entry has been fantastic. We did a soft launch in January and over 14,000 customers from Kalyan and neighboring districts visited the store in a single day. We invested Rs 7 crore into this store and expect to break even in 3 months.
IRN: What is your short-term forecast for The Loot and for the Indian retail industry?
Jay: We consider ourselves recession-friendly as people look for that extra value during a recession. We did 70 crores in sales last year. Our target for the next financial year is 125 crores. We are a profitable business.
In terms of the retail industry, the value-driven and need-based retail segments should be fine. Lifestyle retailers will face challenges.
IRN: You have Gulshan Grover as your brand icon. What is the reasoning behind the choice?
Kabir: We wanted to be different and not follow the conventional approach of working with a hero. We approached Mr Gulshan Grover and fortunately he agreed. He is our modern day Robinhood who 'loots' from the brands and distributes it to our customers at low prices. Keep looting!