The Souled Store, a beloved name in pop culture merchandise and casual wear, is gearing up for an exciting transformation. With plans to raise up to ₹2,000 crore through an upcoming initial public offering (IPO) within the next 18 months, the Mumbai-based retailer aims to fund its ambitions for international growth and expand its physical presence in India.

Expansion Plans on the Horizon

Co-founder Vedang Patel recently shared insights into the company’s strategic financial maneuvers. The finance team is currently in the process of selecting investment bankers to finalize the IPO details. The funds raised will not only fuel expansion into international markets, starting with Dubai but also enhance their retail footprint across major Indian cities.

• Target Markets: Expanding operations in India and venturing internationally, especially in Dubai.
• Product Diversification: Introducing new items such as floor rugs and decorative patches.

“We’ve pinpointed three key areas for growth: expanding our physical presence in India, launching operations abroad with a focus on Dubai, and widening our product offerings across all platforms,” Patel explained.

Dubai: The Next Stop for Retail Expansion

Dubai has been strategically chosen as the first international destination due to its appealing retail environment and proximity to India. Patel mentioned that understanding the local supply chain will be crucial, as there are specific regulations regarding the imagery and text used on apparel.

• Focus on Local Regulations: Adapting product offerings to meet Dubai’s guidelines is essential for success.

In India, The Souled Store plans to increase its number of physical outlets from 40 to 60 by April. The brand initially launched its brick-and-mortar presence in Mumbai and is now expanding to various metropolitan and tier-2 cities.

Strategic Locations for Physical Stores

Patel emphasized the importance of locating stores in areas with a vibrant shopping culture. “We want to establish our presence in cities where shopping is a local tradition, whether that’s bustling markets like Linking Road and Colaba Causeway in Mumbai or popular malls in smaller cities,” he said.

• Cost of Expansion: Opening a new store typically costs around ₹3 crore, primarily due to interior design and leasing expenses. However, Patel noted that high revenue per square foot in metro areas mitigates the impact on profit margins.

Revenue Growth and Future Projections

The Souled Store is poised for significant financial growth, forecasting a revenue of ₹500 crore by the end of the current fiscal year, a notable increase from ₹360 crore in FY24. As the brand broadens its product range, which currently includes apparel, footwear, fragrances, and accessories, it aims to become the go-to destination for all things pop culture.

• Product Portfolio Expansion: New SKUs will be developed and launched strategically, focusing on sustainable trends rather than fast-changing categories, like mobile phone covers, which have been phased out.

Patel noted that approximately 80% of the company’s revenue comes from repeat customers, which underscores the loyalty and trust they’ve built. The addition of physical stores will allow customers to experience products firsthand, enhancing the likelihood of increased sales.

Balancing Online and Offline Sales

While pop culture merchandise originally constituted half of The Souled Store’s sales, casual wear now makes up the other half, reflecting a diversification in their offerings. Together, online and offline sales channels account for about 80% of total revenue, with marketplaces contributing the remainder.

The Souled Store’s ambitious plans for expansion and diversification not only signal its commitment to growth but also highlight its strategy to enhance customer experience in the ever-evolving retail landscape.