22 November 2019 The Zudio store and products have a trendy look and feel, offer only casual wear (no formals) and is targeted at young value-seeking consumers. The lower pricing has also been possible due to (a) passing-on of low gross margin benefits (~30% v/s Westsides 55%), and (b) no marketing costs (in line with Westside). Given the low gross margins, Zudios success lies in its strong turnover revenue/sqft of ~12-15k/sqft (v/s industry average of INR8-10k/sqft). Zudios high fashion appeal and sharp pricing has led to an encouraging store operating metrics. Therefore, a franchisees capex is INR15-20m for a store size of 6k sqft; in turn, a franchisee receives a fixed revenue share, while the company operates the store and retains the profitability. Typically, franchisees get ~16% revenue share and 12-15% IRR, while the company garners strong ROCE on merely one-month inventory capital.