In an interview with ET, Shamim said Light Speed Sports has been set up on a low-cost model to ensure profits. It plans to open stores in small towns like Sirsa, Guntur and Hubli besides metros, and leverage[5] Dhoni's gym business Sports-Fit, he added. Edited excerpts:
Does Dhoni have equity in the venture?
Sajid Shamim: He has shown a keen interest in being partner or shareholder of the business in future. For now, he's brand ambassador of FitSoul. He's the pull factor. He brings in credibility. He's also mentored the business and advised us.
What is the shareholding pattern among the three partners?
Sajid Shamim: It's more or less equally split between me, Singh and Rhiti Sports.
Who's funding[6] the business?
Sajid Shamim: The three promoters have started with seed capital. But we're mid-way through an angel investor process for the first round of funding. We're looking to turn profitable in three years. Light Speed Sports is the holding and marketing company and the stores will be set up through the subsidiary Light Speed Retail.
The organised retail sector is struggling with incremental costs and low consumer spending. How will your business work?
Sajid Shamim: We see ourselves as a condensed version of Shoppers Stop in sports. Our stores will be small — about 500-1,000 square feet in size. Our financial model and survival mantra are based on low rentals. We won't get into glitzy malls. Most of our stores will be neighbourhood ones.
We've arrived at this model with the objective of driving profits. We're not into impulse buy like, say, a Zara shirt. If a consumer wants to buy a tennis racket, he would plan it in advance. We are into a planned purchase category, so we can avoid high rentals.
But organised sports gear is high-priced and you're targeting small town consumers. Do they have the spending power?
Sajid Shamim: There's lot of passion for sports in these places. Dhoni is also from a small town. We're putting up a mezzanine offering at our stores — which means there are enough mass-priced options for consumers to choose from. A consumer wanting sports shoes doesn't have to buy only a Nike[7] or a Reebok. There's Cosco and Nivia, which make very good quality sports gear at lower prices. So, we're segmenting within categories. We're retailing a Nike along with a Cosco. We're also selling sportswear through our private label FitSoul.
But it's not as if we're neglecting big towns. We will be in metros in neighbourhood places but the focus will be on smaller markets. So, we will have a store in Mumbai's upscale Bandra, but also one in Thane. Most of the six outlets we have up and running among our 350-store target in five years are in neighbourhood locations — Sirsa in Haryana, Tonk Road in Rajasthan, Thane in Mumbai. We're making active calls in Lucknow, Kanpur, Guntur, Hubli, to name a few. There's also one in Australia.
What's the potential of the sports and fitness business in the country?
Sajid Shamim: It's close to a $1 billion (about Rs 6,400 crore) business in India. This includes footwear, equipment and the unorganised business. It's growing anywhere between 20% and 30%. So there's huge opportunity to grow. But availability of products is scattered and remains largely unorganised.
References
- ^ sports (economictimes.indiatimes.com)
- ^ FitSoul (economictimes.indiatimes.com)
- ^ Sajid Shamim (economictimes.indiatimes.com)
- ^ Reebok (economictimes.indiatimes.com)
- ^ leverage (economictimes.indiatimes.com)
- ^ funding (economictimes.indiatimes.com)
- ^ Nike (economictimes.indiatimes.com)
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