Following a two-year period of slow growth, failed ventures and consolidation, flower retail chain Ferns N Petals is now all set for breakneck growth. The group is planning an IPO by 2013 and targeting revenues of Rs 500 crore by 2015.
This year, the group expects to touch Rs 150 crore in revenues. It is also planning to dilute stake to raise around Rs 25-Rs 50 crore from a private equity firm next year in a bid to fuel growth and expansion.
From Rs 60 crore in 2006, FNP grew to Rs 100 crore in 2008, after which growth slowed to 20-25 per cent in 2009 and 2010. The slowdown was a result of failure at attempted diversification into health, beauty, lifestyle and food businesses. In 2006, the company to launch a chain of traditional fast food outlets called Chatak Chat which was ultimately shut down. In August, 2008, the company announced that it would raise Rs 250 crore from an IPO in 2010, but it did not take place either.
“We underwent a consolidation stage and had to strengthen our primary verticals. We had to correct a few other things which were not doing well. Chatak was one of the businesses which did not take off. We did a lot of research and hard work to reinvent ourselves over the past two years and it has been slow. But now we are focused on high intensity growth,” said Vikaas Gutgutia (in pic), co-founder & MD, Ferns N Petals. “2012-13 is going to be very happening for us.” He added that the company had plans to go public in 2013.
FNP currently has 110 outlets across the country, of which 80 are outside Delhi and handled by franchisees. It is rapidly expanding these franchisee outlets at a rate of one per week and will add 50-60 per year. FNP also plans to set up more company-owned outlets across the country. Around 20 outlets will be established in the next two years. The cost of each outlet is between Rs 10 lakh and Rs 15 lakh, depending upon the location, said Gutgutia. The company will also expand operations to Hyderabad, Bangalore and all metros, starting with Mumbai, which is expected to be up by August.
Foray Into Floriculture; Expansion Plans
The group is venturing into floriculture for the first time and has finalised the land for a facility in Bangalore. The facility will be ready by March, 2012, according to Gutgutia. Flowers grown there will be used by the company and will be sold to other retailers as well. Gutgutia expects the facility to produce 10 million flowers per month.
Weddings happen to be a key market for FNP this year. The company plans to expand its wedding business in-house and replicate the New Delhi model in Mumbai. By March next year, the company will set up an overseas presence, starting with Dubai.
The group is also taking initiative to brand Ferns N Petals as an affordable service. “We are making FNP more friendly and popular. There is a myth that FNP is expensive and it has to be broken,” said Gutgutia.