Elena Pismenskaya: rating of children's clothing franchising
What kind of franchise to choose for a young entrepreneur? What brand will bring success and profit? A properly chosen franchise can be the beginning of a successful development of an entrepreneur in the market of children's clothing. Our expert Elena Pismenskaya, Kids Fashion Retail consulting agency General Director, shares her recommendations.
It is very important to determine the characteristics of the business intending to purchase the franchise: whether the company has experience, and resources, and in what city it is going to operate. It is also very important to evaluate the purchasing power of the population, to analyse the competition, and to find out whether the location of the shopping centre is properly selected.
The next important factor is what product range the brand you are going to franchise offers. Opening a franchise store is not even half the battle. The most important thing is a constant and proper operation of the store. The issues of conversion, average receipt amount, and the number of permanent buyers are very important even for a very successful brand; these are the key factors influencing the commercial success.
Moreover, of course, the marketing activity of the parent company can be of great help: advertising, interesting events, well-thought-out trade marketing campaigns.
There are three brands leading in the number of outlets of the retail chain: Gulliver®, Choupette®, Orby®. Gulliver® and Orby® started their development in 2006 and in 2008, accordingly. The main growth of their retail chains was in 2010-2014. Choupette® started its franchising program in 2011, and the active stage of their development is happening now.
In order to analyse the entry into franchise business, let us take a deeper look at three factors: investment into the store opening, the lump sum fee, and the system of working with product stocks, as one of the important points of risk reduction for an individual entrepreneur. The amount of the initial investment depends on the floor space, on the rent, and the condition of the shop: whether you have to make a small refurbishing, or you will be renting a completely new floor space, which will require a solid investment.
Only three companies require the entry fee: Choupette, Crockid, Playtoday. Although its amount is minimal compared to the initial investment and to the cost of purchasing of their collections, it should be considered a demonstration of your “serious intentions”. Anyway, the entry fee in Choupette is 130,000 rubles, and in Crockid and Playtoday it amounts to 30,000 rubles and 45,000 rubles accordingly.
The fee amount is small, but it stimulates both parties, and the franchising customers can rest assured that all the services supporting the store opening will be affected in full: support in renting agreement, 3D design, merchandisers and trainers will visit and help with the store preparation for the opening.
Operating the product stocks is a very important issue, and, the following company can be marked in this case: Playtoday gives goods for consignment, and the franchisee has to pay only for the sold goods and return the remaining stock. This is a very good help for a small entrepreneur, because I often encountered in my practice the problem of lack of assortment or, on the contrary, a large number of products of past collections which “prevents” a relevant presentation of new collections.
It is imperative for the brand to provide commercially successful collections throughout the year. For example, Reima is a leader in the outerwear category and is actively expanding its product range and at the same time developing their brand retail. However, anyway, jackets, overalls, and outerwear sets are the bestsellers of Reima.
Silver Spoon is attractive since its portfolio offers 2 brands: school clothes under Silver Spoon brand and outerwear under Huppa brand. This adds competence to the project, because in this case the store offers 2 brands.
Crockid - a strong brand - is constantly working on its product range; and in addition to excellent outerwear collections, they offer knitwear and underwear made using seamless technology.
Choupette: It has perhaps the strongest assortment in the category of clothes for newborns, since, historically, the brand began its development from this category. Constant interesting collaborations, the latest of which is a cruise collection in partnership with Army of Russia brand, and a stylish shoe capsule
(To be continued in next issue of The Newsletter of the Mir Detstva exhibition)