Chic Republic Co, the furniture and home decor store, has launched a sister brand for younger customers as part of its expansion plan in a bid for sustainable growth.
Chief executive Kijja Pattamasattayasonthi said the new brand Rina Hey is located near the Chic Republic store on Ratchapruek Road.
Rina Hey, which sells industrial loft-style furniture and decorative items, targets youngsters, first jobbers and new families. Its products are about 30% cheaper than those available at Chic Republic stores.
Rina Hey will run under a new business unit.
The company plans to open more Rina Hey shops at Chic Republic's existing and new stores, having the sister shops under the same roof as Chic Republic stores in urban locations while stand-alone flagship Rina Hey stores will be used to penetrate the provincial market in the next two years.
It is looking at two potential provinces for the stand-alone stores: Chiang Mai and Ubon Ratchathani or Udon Thani. Each will require an investment of 100 million baht.
For Chic Republic stores, the company plans to open its fifth Chic Republic branch in the north of Bangkok at a cost of 200 million baht on 10,000 square metres. Apart from retail sales, the company is also pushing its furniture directly to residential projects.
"2017 will be a transition year for the property sector as major developers will turn to building homes for upper-middle income people to reduce the risks from limited purchasing power and the complications in securing mortgages," Mr Kijja said.
The government's strategy to build 10 provincial clusters in provinces is also expected to boost the purchasing power of middle-class customers.
"We see opportunities in developments whose target customers are middle and upper-income earners even though the overall economy is still sluggish," he said.
The company's has three Chic Republic stores in Bangkok, in Paditmanutham (Ekamai-Ramintra Expressway), Bangna-Trat Km.4 and Ratchapruek, and one in Pattaya.
Following market trend, Chic Republic plans to launch its e-commerce website by the middle of this year, while Rina Hey's marketing strategy will also be geared towards online business.
The company also plans to expand its furniture business into nearby countries over the next few years. Cambodia and Laos are in the pipeline, through its own investment or a joint venture scheme. It requires an investment of 300-400 million baht for an overseas branch.
Sales of Chic Republic grew 2-3% to 860 million baht last year. Of the total, about 75% came from retail market and the rest from projects. The company expects its sales this year to grow by 5-10% to reach 900 million baht. In the next 2-3 years, it expects 65% of sales to come from Chic Republic and 35% from Rina Hey.