Titan Industries is on the verge of signing an agreement with Hugo Boss for becoming its franchisee for watches in India. According to sources, the agreement will be for a period of five years and Titan will receive 10 per cent of the revenue as fee.
Sources said the Hugo Boss range would be sold both through Titan’s exclusive showrooms and its multi-brand outlets. Currently, Titan has a similar agreement with Tommy Hilfiger to retail its brand of watches through Titan outlets.
The Titan retail network consists of roughly 185 “World of Titan” stores across the country. The company also retails its watches through another 150 multi-brand outlets.
In another initiative, Titan Industries intends to revive its brand of watches for children, Dash. According to Bhaskar Bhat, managing director, Titan Industries, Dash had been withdrawn because it was not profitable enough.
The Dash range was earlier priced below Rs 500. This time around, the company intends to price the watches a notch higher. Bhat believes that with consumerism on the rise, customers today are willing to spend a little more even on watches for children.
The watch industry is estimated to be around Rs 3,000 crore, with 60 per cent of the sales coming from the unorganised sector. Of the 35 million watches sold annually in India, less than 5 million watches are priced at over Rs 1,000.
Titan’s main brands for watches are Titan, Sonata and Fastrack. By 2008-09, Titan hopes to increase the sales of its watches from 4 million units in the economy segment to 6 million units and from 3 million units in the premium segment to 4 million units.
The contribution of premium watches to the entire pie, though, will not change significantly, because Titan plans to introduce watches below the price point of Rs 200 for the smaller towns.
With the penetration of watches here estimated to be below 30 per cent, Titan hopes to take advantage of the opportunity.
Titan’s total revenues from watches stood at Rs 150 crore for the June 2006 quarter, an increase of 18 per cent over the last financial year. For the year ended March 2006, revenues were Rs 655 crore from the watch segment.