By:-Uday vijManishGarima

AmitSupriya

Introduction Archies was established in 1979 by a Delhi Based person

named Anil Moolchandani and his brother Jagdish Moolchandani .

In 1984 ,company launched its first outlet in Delhi named “Gift Gallery” .

In 1987 ,the first exclusive Archies gallery was set up in Kamla Nagar, situated in the heart of the Delhi University Campus.

Moolchandanis managed to break even in the first year itself with sales touching Rs 2.2 million.

Cont’d:- In 1990, the brothers established Archies Greetings &

Gifts Pvt.Ltd. with its three product lines i.e.Greeting card,gift items & stationary products.

In 1994, Anil decided to install a printing unit for the company and tied with the US based Gibson card manufacturing company.

In 1995, Archies was incorporated as a Public Limited Company with its initial Public offering of Rs.74 million.

By the end of 1990,Archies was operating in Greeting cardsGift itemsStationery products

Greeting cards divisionContribute 69% to the company revenuesCards for every major festival in both English and

Indian languages

Gift item division: Contribute 15% to the turnover. Gift item include photo album,frames,clocks,stuffed

toys,sunglasses,pen stand and other decorative items. In 1999, the division began to sell deodorant and perfumes under

the brand names Boyz and Gals.

Stationary product division: Contribute 16% to the company revenue Products comprised of autograph books,diaries,calendars ,gift

wrap fancy stationary etc

Archies had four branch offices in Mumbai,Ahmdabad,Ludiana and Hyderabad.

Products were retailed through : Archies Gallery: First concept store opened by

Archies,typically 500-1000 sq.ft. in size. Archies-The card shop-Smaller in size than the Archies

Galleries. Paper Rose Shoppe: shops with an area f 100-150sq.ft. with

around 85%of Archies merchandise. Archies Feelings:Chain of greeting cards and gift outlets in the

state of Gujrat. Premium Archies Galleries or Vision 2000 stores: Exclusive

Archies showroom housed at prominent locations. Other retail outlets.

Tackling The e-greetings Threat Archiesonline.com had three major sections :

Meet - Free e-mail , chat , reminder services ,greetings scheduler Greet - A consumer interaction area where registered customers

could send and receive a variety of animated e-cards/greetings online.

Gift – Purchase gifts an get them delivered at their doorstep.

Tied-up with Elbee and Blue Dart to deliver the gifts and cards and with Easy Net.com for payment gateway

Entered into strategic alliances with Yahoo.com, Jaldi.com, Indiagreetings.com to secure online penetration in various youth oriented portals by leveraging the Archies brand equity

Snapped ties with Yahoo and tied up with Indiatimes.com with a 50:50 agreement

Decided to make archiesonline.com a paid site Ran a nationwide ad-campaign to spread the idea of

‘equate e-cards with fun’ Decided to treat online venture as an extension of its

business Novel concept like e-crackers enabled surfers to burst

pollution free crackers Portal claimed to have registered over four million page

views and programming of 0.15 million e-greetings in Sept 2000

The Distribution Revamp The company decided to revamp the distribution

network in 1999-00. replacing it 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 catering to distributors who in turn catered to retailers.

Advantage:- Company owns the inventory

Consumer is ensured of seeing entire products range that is available.

Cost cutting – Distributor’s margin was 25-30% while C&F margin was 12%

Helped Archies penetrate deeper into the markets because of wider reach.

With C&F agents and exclusive outlets company could better revamp its product portfolio

The Retail Revamp In 2001 Archies’ began an exclusivity drive where

Archies’ Gallery franchisees were asked to keep only Archies’ range of products.

Franchisees were given an option of converting into an Archies’ Paper Rose Shoppe on a ‘non exclusive ‘ basis.

Archies’ also planned to increase the number of ‘vision 2000’ stores which were much bigger and had world class interiors.

WHERE RATIONALIZATION GONE WRONG? Decline in profitability: During the conversion stage from di

stributors to C&F agent set up . This increased the level of Inventory This forced the company to outsource fund and therefore

incur a heavy interest burden.

In addition, Archies had to pay higher interest on working capital .

Though Archies planned to take retail space on lease, it had to invest heavily in real state.

 

What went wrong??? Application of injuction filed by archies

greetings and gifts limited

Archiesonline.com was made a paid service

They converted its network of franchisee outlets into company owned outlets

The Future of Archies Focus more on gift segment Introduce new lines Importing high end gift articles Outsourcing Competitive Pricing and co-branding Focus on corporate sector New range of economy cards Changed its name- Archies Limited