Keeping it real

Very much like a debutante, 18-year-old Crolific Garments Manufacturing Corp. is spreading its wings. It intends to open five franchised stand-alone Bobson lifestyle boutiques this year, two each in Metro Manila and in Luzon and one in Mindanao, on top of the two opened last year. By end-2007, the company targets 40 boutiques.

Right now, the company has 29 outlets and about 100 concessionaire/stalls in various malls nationwide.

"Franchising is key to our projected double-digit growth starting this year. Margins are small in the garments industry. We’re talking about a few pesos profit per unit sale instead of hundreds of pesos. To make money, we need more outlets to sell an expanded line of products that includes fashion accessories and fragrances," said president Victor Tan.

Last year, Crolific generated a 7% growth in sales, well within the average of the garments industry, which currently has an active roster of only eight players.

Lower Costs

Crolific started in 1987 with an initial capital of P200,000 and 30 employees.

"We made the designs and the patterns and we controlled the materials but we didn’t do the actual production. We used subcontractors, all of them based in Metro Manila, to keep our costs down," said Tan.

Production was set up to quickly react to the market. Based on the weekly feedback meetings of frontliners, production of items whose sales dropped by at least 30% were quickly stopped and reconfigured to the production of faster-selling items.

Initially, the company concentrated on just selling what it could produce under the Bobson brand. Later, it focused on the 13- to 25-year-old youth market, largely because trendy designs tended to have a short shelf life and generate repeat sales for the next fashionable design. For this reason, the Bobson brand now comes up with major themes and motifs every quarter. Within each quarter, however, new variants of the themes are released monthly. "The youth have money to spend but are always on the look out for something new. Just as important to them as good quality products at good prices is the service they get from sales personnel," said Tan. "A bonus for us is the spillover market or those beyond 25 years old who buy our products."

The company currently sources the bulk of its fabrics from importers/suppliers which buy from Taiwan, Hong Kong, and China.

"It’s a plus-minus game that should result in a positive bottom line. Because they buy in large volumes, importers are able to get the fabrics are good prices. We would probably not be able to get such prices if we went abroad and dealt directly with them. Besides, we would have to input the cost of travel and relationship-building in the equation," said Tan.

Franchising

Franchising of Bobson boutiques is handled by a sister company called Sense ‘N’ Style Corp.

Preferred locations are the ground or second floor of a mall or a street-level location in a high pedestrian and vehicular traffic area. Some of the existing Bobson stores may also be open for franchising.

For a 60-80 square meter boutique, the estimated investment is P2 million , inclusive of a P500,000 franchise fee, renewable after five years.

"We are looking for franchisees with a sense of ownership, not just ready capital. We are looking for partners who are willing to grow with us. We now directly employ 600, most of them involved in on-site sales. Indirectly, we employ 100 through our subcontractors," said Tan.