Royaloak Furniture plans 1,000 stores and Rs 100 crore

Royaloak Furniture will invest Rs 100 crore in a new manufacturing facility in Bengaluru as it pursues a target of 1,000 stores within three years. The company plans to add roughly 100 stores this fiscal year, aiming to end FY27 with a network of over 300 outlets.

Vijai Subramaniam, chairman and co-founder of Royaloak Furniture, stated the ambitious goal is based on current expansion momentum. "We believe crossing 1,000 stores is achievable over the next three years, based on the pace at which we are currently expanding," he said. The retailer currently operates more than 250 stores across India and has a pipeline of about 100 projects in various stages.

Expansion Strategy and Market Opportunity

The expansion is targeting tier 2 and tier 3 markets, where the company has already opened 10 to 15 stores this financial year. Subramaniam noted the response in these smaller cities and towns has been encouraging. He sees a major opportunity in the fact that organised retail accounts for less than 8% of India's total furniture market.

Royaloak's typical large-format stores range from 15,000 to 20,000 square feet. These outlets display a wide product assortment to help the tactile shopping experience Subramaniam says customers demand.

Financial Targets and Growth Drivers

The company is targeting approximately 50% growth this year. Its Gross Merchandise Value (GMV) is expected to rise to around Rs 1,750 crore, up from Rs 1,250 crore in the previous fiscal year.

This growth is being funded internally. Royaloak operates as a bootstrapped business, financing its expansion through operational cash flows. The company is currently EBITDA-positive, with all existing stores at break-even. On average, a new store takes about six months to reach profitability.

Manufacturing Investment and Operational Control

The bulk of the Rs 100 crore investment is allocated for the new 2 lakh square foot manufacturing plant in Bengaluru, which is targeted for completion by the end of this financial year. This move is intended to give Royaloak greater control over production and scaling efficiency. Currently, the company works with three contract manufacturers and sources from more than 250 vendors.

Alongside manufacturing, the company is investing in technology, ERP systems, and e-commerce. While physical stores remain the core of the business, online sales contribute about 10% of total revenue, a share Royaloak aims to increase.

Geographic and Category Expansion

South India contributes roughly half of Royaloak's business, with the East accounting for another 25%. The company is now increasing its focus on expanding in North and West India.

Beyond core furniture, which makes up 80-90% of sales, home décor and office furniture are emerging as strong growth categories. Internationally, Royaloak has four stores in the UAE, contributing less than 5% of overall revenue. The company has also received enquiries from markets in Africa, the US, and Australia, with a clearer international plan expected by year-end.

Subramaniam indicated that external capital could be considered as the company scales toward its 1,000-store goal, but only if it makes strategic sense.