From a trade-led footwear manufacturer rooted in Kerala to a brand recalibrating itself for the age of Gen Z and instant commerce, Paragon is in the midst of a significant transformation. In this conversation with BW Businessworld, Nakhul Joseph, EVP Retail, Franchise & HR speaks about the brand’s evolving retail strategy, aggressive expansion roadmap, franchise-led growth model and how data, affordability and trend-led design are shaping Paragon’s future.
Paragon has traditionally been a strong trade-led brand. How are you redefining the in-store experience today to engage a digitally influenced consumer?
Paragon began its journey in Kerala in 1975, and we are now celebrating our 50th year. For decades, our core business was a pure trade model, working with nearly 450–500 dealers across India who supplied multi-brand outlets. About a decade ago, we consciously began steering the business towards e-commerce and exclusive brand outlets (EBOs). We started with company-owned stores—around 100 of them—initially in Bengaluru and then expanded across Karnataka, Tamil Nadu, Andhra Pradesh, Telangana and Kerala. Having established this base, we are now transitioning towards a franchise-led model to scale faster while continuing to refine the in-store experience.
What are the core elements of this new growth strategy, particularly in terms of urban and emerging markets?
Historically, Paragon has been strongest in tier 2, tier 3 and even tier 4 cities—this remains our mass-market strength. These markets are central to our EBO and franchise expansion plans. For tier 1 cities and major metros, our approach is more strategic. Here, we intend to open select company-owned stores, which can function as flagship locations. These stores not only strengthen brand visibility but also allow potential franchise partners to experience the format and range first-hand.
You have outlined an aggressive expansion roadmap. Could you elaborate on the franchise model you are adopting?
Our target is to reach 250 stores by 2028, largely driven by franchise expansion. We are offering a hybrid Franchisee Owned, Company Operated (FOCO) model. The investor typically puts in Rs 30–35 lakh, depending on the city, but importantly, their capital is not locked in inventory. Paragon manages stock, replenishment and liquidation. Franchisees receive a base margin of about 32 per cent, with scope to earn more by selling higher-value products. The expected return on investment is close to 30 per cent year-on-year, with capital recovery in roughly two-and-a-half to three years.
How are shifting consumer preferences—especially among Gen Z—impacting the Indian footwear market?
There has been a clear shift. Earlier, consumers prioritised durability and basic value. Today, Gen Z is looking for footwear that is trendy, comfortable and still affordable. Social media has played a significant role in accelerating this change, even in smaller towns where internet penetration is high. We are also seeing a move from slow fashion to fast fashion. Additionally, sustainability awareness is growing. For instance, a recent initiative where customers received a discount on new leather footwear by returning old shoes was extremely well received.
How does Paragon leverage data and omni-channel integration to enhance customer experience and loyalty?
Data is becoming increasingly central to our decision-making. We use tools such as Tableau to build dashboards that analyse our SAP data, helping us predict trends and optimise assortments. One of the most interesting developments has been the impact of quick commerce. Unlike traditional e-commerce, where returns—especially due to sizing—are high, quick commerce has far lower return rates. It focuses on a limited set of high-velocity SKUs, which has been unexpectedly positive for our margins. This is an area we plan to focus on much more aggressively.
What distinguishes Paragon’s new-generation retail stores from competitors?
While open footwear has always been our core strength, we have expanded significantly. We have introduced three sub-brands aimed at younger consumers: Carmicci for leather footwear, Eeken for athleisure and closed footwear, and Stimulus, which is sharply focused on youth-led designs. Our biggest differentiator is range—we cater to everyone, from children to formal footwear buyers, offering joggers, clogs, school shoes and more. Importantly, our pricing remains highly competitive; we are typically around 30 per cent cheaper than our closest legacy competitors. From a consumer perspective, the value proposition is quite evident. Paragon’s products offer good quality, everyday wearable designs that are light on the pocket—making them genuinely value for money. |
