Profitable Business Opportunity with Linen Club

Preeti Shishodiya
Preeti Shishodiya Feb 23 2021 - 5 min read
Profitable Business Opportunity with Linen Club
As compared to other industries, linen industry and Linen Club as a brand particularly have bounced back much faster into the business after COVID.

Linen is a fabric well-known to all. The flax plant that produces linen is grown in France, Belgium, and Italy. Linen is versatile, natural, and sustainable in origin, and because of its qualities, it is a fabric to reckon with in its current fashion landscape.

Earlier, linen was connected to politicians and professionals because of its purity, quality, and cost. Lately, with newer designs and fabric blends, linen has been seen in varied segments of clothing.

What one needs to know that linen is popular because of its purity and quality. Hence, a linen brand that is well-known for its purity would give a good business opportunity to a franchisee.

Linen Club is a fabric brand that comes from a 70-year-old group, the Aditya Birla Group. It was first dealing with wholesalers providing them linen fabric. Recently, it has started with its retail outlets with over 200 stores across India.

Linen Club: One of the Best Brands in Linen Fabric

Linen Club has 100% pure linen and is the No. 1 brand in the linen fabric. It has the widest range of linen fabric and apparel. It introduces over 3000 designs each year. It has its retail footprints across India with both COCO and FOCO models.

As compared to other industries, the linen industry and Linen Club as a brand particularly have bounced back must faster into the business after COVID. It has been witnessing rapid progress as well. Hence, the expectation is for strong growth in the coming years.

Linen Club is authentic, premium, and passionate about linen.

Why Invest in Linen Club?

Linen Club has a heritage advantage since Aditya Birla Group is crafting since 1949. It was the first in the industry then. Today it is the best linen brand in India.

The main differentiating factor that sets Linen Club apart from others is that its expertise in the industry and the heritage significance. It is certified by CELC, the mark of the European flax. Also, it has the widest range of colors, textures, and designs.

How is the product different from any other in the market? Linen Club has premium and luxury pure linen. They are natural fabrics. The brand provides the styling and tailoring of these fabrics. Now, linen blends have also been introduced. The company is trying to cater to the youth as well by introducing fashion statement apparel.

Franchise Facts

Linen Club believes in the local business FOCO model where the partner needs to know its geography well. The brand doesn’t need only investors; it needs the partner’s effort and involvement in the business.

Area and Investment: The area required for a store set up would be 800 sq ft with a CAPEX of Rs 20 lakhs, and stocks of Rs 24 lakhs. There is a requirement for a security deposit of Rs 10 lakhs. This makes a total investment of Rs 54 lakhs for an 800 sq ft store. The setup cost of tailoring the unit and the rental deposit to the landlord is not considered in the above expenses.

Margins: The margin given is about 50-55% on fabric sales, and 34% on apparel. It is 20-25% during EOSS.

ROI: The average targeted ROI is between 35-40% at the EBIDTA level. Fresh cash flow starts from the third year.

Stock: The stock to turnover ratio is 2.5 apparels and 1.7-1.8 in fabric. A scope of 10% stock correction is given in the beginning when the partner is unaware of the stock mix that works in the area. Later, this percentage reduces to 3.5%. The booking of stock could be done either digitally or at a quarterly conference. The sales personnel also visit the store every month for sample booking.

Tailoring is Mandatory: The vendors are nominated from Hyderabad to supply threads and trims. The company suggests multi-unit franchisees set up a complete tailoring area. A single unit can keep a few tailoring machines for alterations.

The brand is looking to expand majorly in Andhra, Telangana, and Tamil Nadu.

Brand Support

The brand gives 1.24 lakhs p.a. for 5 years as Capex that is paid each quarter.

The launch advertising and additional advertising during the festive time are taken care of by the brand. The brand is active on social media and also has a robust loyalty scheme for customers. This keeps the customers intact.

Linen Club is particular about the tailoring services it provides to the customers. Hence, it selects good tailors from NIFT and gives a 4-day training to them. It is required for the tailors and staff to have soft skills. They should be presentable and confident. Both the tailors and staff with the tailor are trained by the brand.

The staff uniform, training, carry bags, signage letters, in-store branding, etc. are done by the brand regularly.

It is the right time to invest since the property market is in a good position for investment. Investing in a strong product at this time, and a brand that cares about the consumer experience is worth partnering with.


Edited By: Vaishnavi Gupta

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