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Three decades on, Archies still playing its cards right, to stay relevant

Pramod Arora, joint managing director, Archies Ltd, the largest manufacturer and distributor of greeting cards, said the company sees exponential growth as it expands into smaller towns.

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Two decades ago, when hangout options were scarce, youngsters and newly-in-love thronged greeting card stores like Archies to meet and greet.

Today, that may not be the reason for them to enter those stores, but the greeting card major says it has maintained a foothold and continues to stay relevant to the ever-demanding consumer.

Pramod Arora, joint managing director, Archies Ltd, the largest manufacturer and distributor of greeting cards, said the company sees exponential growth as it expands into smaller towns.

The retailer runs 195 exclusive stores in the country, selling greeting cards, chocolates, accessories, apparel, and personal care items. It has additional presence through franchise outlets and multi-brands dealer stores.

 “Right now, we are at the tip of the iceberg. What have we got? What have we achieved? We haven’t even gone across the country, to every nook and corner of the country,” Arora said.

Archies is the only player that has managed to survive in the greeting card segment and the way ahead doesn’t look easy with many brands trying to eat into its market share.

Archies, set up in 1979 by Delhi-based Anil Moolchandani, began with selling song books, posters and leather patches. It then started selling greeting cards somewhere in mid 80s. Gift items across categories have now become a significant contributor to sales, almost 60% of company sales are from gifts and the remaining 40% from paper products like greeting cards and stationery items.

Arora said it took the company 25 years to reach Rs100 crore in turnover. It is likely to close this financial year with Rs190 crore sales. “In another five years, we must cross Rs400 crore in turnover,” he said. Despite umpteen rumours of Archies selling out to bigger retail players, Arora said, “So far, we have not given it (selling out) a thought because it is a business that we do with a lot of passion.”

The greeting card business in India has witnessed a lot of players —  regional and national — that collapsed over time as they lacked the ability to transform themselves. Archies today faces minimal competition in the segment it is present in, but Arora says that the various retail formats that have emerged in the recent years are posing a threat.

The company has recently entered into a licence deal with US-based, $4-billion, Hallmark Cards and is planning out a growth chart for the brand in India. For almost two decades, Hallmark was being licensed in India by Vintage Cards that failed to grow the brand in India and lost out to Archies.

“We took it upon ourselves to take the Hallmark licence in India and now we are planning on how to grow the brand in India, we are planning Hallmark stores that will then compete with Archies. We will open Hallmark stores in some of the markets where Archies is present already. So, we are least bothered about being the number one or the number two player,” he said.

The company has also received an approval from its board to raise Rs40-50 crore for expansion. “So far, we have been doing things through internal accruals and with a little bit of debt here and there but now if we have to expand beyond what we have been expanding, we will need to look at some funds. We will look at various options,” Arora said.

Somewhere in 2000, Archies started selling its products online, but not finding it feasible, the company shut down its online business soon after, only to restart it much later, in 2008. Online sales today contribute a mere 0.5% to Archies’ total turnover but the company says it is growing strongly.

Initially, Archies was focused on franchise-run stores, and dealers running multi-brand stores. It later made a retail foray to establish the organised greeting cards industry. “When we found that the franchise stores were still lacking global standards, we went into retail ourselves. When we went into retail, we needed to give consumers good experiences not only with greeting cards but with gifts too.
And the gifts business kept on growing,” Arora said.

The company’s creative and design department is run by 40-odd people who are constantly churning designs for products across categories. The products are mainly imported.

“We keep constant track of what is happening across the globe, we keep ourselves up to date with trends and try to offer our customers that,” Arora says.

The greeting card business works in peaks, showing spikes during occasions like New Year and Valentine’s Day, where sales typically surge in the last three days.

Arora said while the seasonal business has been impacted by consumers preferring to text or email during Diwali, New Year and Christmas to buying greeting cards, there has been an equally strong growth in corporate orders during these occasions, also from newer occasions like Valentine’s Day, Father’s Day, Mother’s Day, Rakhee and others.

“So where we have seen a decline in seasonal greeting cards, the gift selling has gone up during these times. The greetings cards have not grown; in fact they have come down a bit. But we have more than made up from other occasions — Rakhee, Valentine’s Day, Father’s Day, Friendship Day — which continue to grow year on year. And that has been more than made up for corporate selling during Christmas and Diwali,” he said.

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