Khadim to restructure its subsidiaries

By

Isabelle Crossley

Published
Oct 30, 2017

The shoe brand Khadim India Limited is planning to change the pricing and distribution of its subsidiaries which are now more profitable than the main brand.

In order to boost growth and profit margins, Khadim is increasing the pricing of its subsidiaries and lowering the prices of their main line as well as tweaking their distribution formula in order to harness the popularity of their more popular lines. Khadim has nine subsidiaries that the company refers to as “sub-brands” and they include Lazard, British Walkers, Softouch, Sharon, and Cleo.

Ishani Ray, Khadim India’s Chief Financial Officer (CFO), said about the brand’s plans: “We are undergoing premiumisation with our sub-brands for consumers aspiring to move up from [the] mass segment to affordable fashion. However, we will restrict our sub-brands to the Tier 2 cities.” By distributing Khadim’s nine subsidiaries in Tier 2 cities and the main Khadim line in Tier 3 cities, the brand hopes to increase their profit margins as Tier 2 customers are more willing to spend more than those in Tier 3. Khadim does have stores in Tier 1 and 2 cities and these will remain but the focus will shift to Tier 3.

The pricing for Khadim shoes will be capped at 500 rupees and at 3,500 rupees for the subsidiaries. In March this year, the brand reported that sales from its subsidiaries totalled 256 crore rupees (approximately 38.4 million dollars) out of the brand’s total retail revenue of 456 crore rupees (approximately 68.5 million dollars) and, by marketing them as more premium brands, they hope the sales figure will only increase.