Archies: The Way Indians Greet

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THE DISTRIBUTION REVAMP

During the financial year 1999-00, Archies decided to revamp its distribution network and replace existing distributors by a C&F agent network. According to the new distribution system, in place of 68 distributors in 21 states, Archies appointed 10 C&F agents in 10 states who catered to distributors who in turn reached out to the retailers.

Manish Jain, Company Secretary, Archies, said, "The biggest advantage of this model is that the company owns the inventory, so the consumer is ensured of seeing the entire products range that is available." In the earlier setup, Archies had to accept the distributors' decision when they picked up only those products, which they believed would do well. As a result, Archies could not push its entire range of products into the retail channel. Rajesh Syal, Marketing Manager (Western Region), Archies, said, "Distribution could not match the pace with which we introduced products and with their limited resources it was difficult. Now with the C&F agents and exclusive outlets we can at least continue to revamp our product portfolio..."

In 2001, Archies began an 'exclusivity drive,' by way of which all existing Archies Gallery franchisees were asked to keep only Archies range of products. If they did not want to be an exclusive outlet, they were given the option of converting into an Archies Paper Rose Shoppe on a 'non-exclusive' basis.

The idea was to have only Archies Gallery and Archies Paper Rose Shoppe as the completely franchised outlets. As a part of this exercise, many shops were revamped and some even had to be shut down. Archies believed that being in direct contact with the customer will help assess the detailed requirements of various product lines, and have better inventory management and product mix systems. In addition, the company was also planning to increase the number of Vision 2000 stores on a large scale. The Vision 2000 stores were much bigger than any other Archies retail outlets and according to company sources, brought in 40% more revenues as well. These stores had world-class interiors and stocked all the products marketed by the company...

The Moolchandanis believed that the distribution and retail revamp exercises will yield positive results after the transition phase. Archies decided to focus more on the gifts segment, as it believed the segment was under-exploited. The company planned to develop and introduce new lines in the gift segment including higher end items, which were lacking in the present setup. The idea was to make an Archies gallery a 'one stop gift shop' for people from all walks of life. The company had already begun importing high-end gift articles such as crystal, soft toys and Feng Shui items from China, Hong Kong and Korea in addition to outsourcing from local vendors...

Exhibit I: Archies - Shareholding Pattern
Exhibit II: A Note on the Indian Social Expression Industry
Exhibit III: Archies - Over The Years

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