Retailers are increasingly accepting the widely agreed fact that consumers love a bargain and always look forward to buying brands at low prices. Factory outlets have become distinct shopping destinations with distinct audiences. Apparel companies are focusing on this market to cash in on consumers converting from stitched apparel to ready-to-wear, further graduating to branded apparel. India is thus seeing a surge in discount retailers offering year round discounts, ranging anywhere between 30% to 70%.

The Future Group has recently launched a new format called the 'Brand Factory' selling national and international fashion brands at discounted prices with discounts ranging between 25-50%. The store will have as many as 120 brands such as Arrow, Esprit, Van Heusen, Levis, Reebok, Lee, Pepe, Wrangler, Provogue and many others, spread over 70,000 sq. ft. of space. The group plans to expand its presence by opening as many as 55 outlets by 2010. The concept is positioned as a direct competition to Arvind Brand's Mega Mart which also sells its brands at discounted prices. Arvind Brands is rapidly expanding their Mega Mart chain with plans to increase there number of stores from the current count of 54 to 150 stores in the next 5 years.

Koutons Retail India, which started as a product brand is today the largest menswear brand in India in terms of its sales and number of stores. The success of the brand’s positioning is very clear from the fact that from a store count of 240 a year ago, it has expanded to 999 in 2007, and its turnover grew from Rs. 58 crore in 2004-05 to Rs. 400 crore in 2006-07.

Close on the heels is Cotton County which will be increasing its stores from 300 to 500 in 2007 and reach a count of 1000+ by 2010. Turnover currently stands at Rs. 100 crore and is projected to grow to Rs. 500 crore by 2010. They are also extending their product portfolio to include womenswear and kidswear.

The Provogue Apparel Group introduced its multibrand discount format 'Promart' in 2007 in Ahmedabad spread over 40,000 sq. ft. and this store has already achieved a turnover of Rs. 25 crore. Their future plans include opening 20 stores in the next 3 years. The 'Loot' is another discount format retailer with 16 operational stores mostly in theWest and South. By 2010 they plan to set up 100 such stores pan-India. The company runs three formats, viz: signature stores, shop in shop and mega stores of 30000 sq. ft. It carries all major local and some international brands.

Going forward, how will these discount stores bring in higher revenue - by increasing number of stores to cater to untapped consumer base, or by adding more segments like womenswear/kidswear/accessories or by offering better quality/colour co-ordinated merchandise?