According to Ernst & Young apparel market constitutes 40 per cent of US$ 375 billion market of organized retail in India. Where organised retail only accounts for 5 per cent of the Indian retail market, it can be well-imagined how big the total apparel market in country is. Considering the new lease of life that has been recently breathed into the Indian economy with situations moving towards better terms, we make a brief market analysis to find out how the apparel retailers are scoring in the market and how are they creating more customer involvement with their product offerings.
Retailers speak
Shoppers Stop has reported rise in sales by 20 per cent by last quarter and the company is chalking out an aggressive plan to make its turnover to 3000 crore in the next five years. Koutons net sales are up by 14.97 per cent in FY 2010. The entire retail mood is upbeat about the positive changes. The international brand FCUK (French Connection UK) is constantly harping on its promotional activities on social networking sites and blogs to ramp up its sales, informs its Communication Manager, Ms Mansi Zaveri. FCUK keeps on adding new collection every 2 weeks. Mr Darpan Kapur, Director of Kapsons, the multi-brand retailer that recently has the y-o-y growth of 25 per cent, views, “The recent sales trend is an impetus for premium brands like Tommy Hilfiger or Calvin Klein whose acceptance among the price-shy Indian consumers will soon increase making them regular brands.” Mr Vijay Bansal, MD, Cantabil Retail India Pvt Ltd informs, “In the last fiscal women’s apparel sales growth was 3.7 per cent and represented 52 per cent of all apparel sales, whereas men’s apparel growth was 4.1 per cent and accounted for 31 per cent of total apparel sales. Women tend to buy at a constant rate, whereas men’s apparel sales have been growing. Wardrobes of individuals under the age of 20 years have 43 per cent of sports apparel, but individuals aged 45 and older generally accounts for 25 per cent of the market.” The Gujarat based multi-brand apparel retailer Jadeblue is expecting 40 per cent y-o-y growth of the entire apparel retail sector.
Encouraging sales results lead towards PE funding
The organized kids’ wear market presently has the business size of 3500 crore in India and growing at an annual rate of 10 per cent. The brands which are dominating the market, such as Lilliput and Benetton, are leaping at 20 per cent. Some well-known brands in this segment are Gini & Jony, Weekender Kids, Lee Kids, Benetton, Ruffkids, Lilliput, Nike, Bare, Lil Tomatoes.
Lately, the encouraging retail environ has witnessed the emergence of lots new brands, such as Eteenz from Dhananjoy Apparel and Italian baby brand Chicco. Danish brand Bestseller is planning to launch its kids’ wear brand Name It.
To encourage customer spending retailers are introducing happy hours. One such offer from Okaidi, a French kids’ wear brand introduced in India by Murjani group, is 20 per cent flat discount on the certain items between 10 am and 12 am, Monday through Thursday.
The plan for expansion especially towards tier II and tier III cites is one game plan for some metro-based brands. Lilliput has inked the deal with private equity firm TPG Growth and Bain Capital for the investment of Rs 385 crore. The target is to double the retail space. Hong Kong-based private equity firm SAIF Partners is in talk with Catmoss, another leading kids’ wear brand, to buy out 30 per cent stake for Rs 70 crore. Giny & Jony is planning to raise Rs 150 crore through a private equity firm to live up to its expansion strategy. Relatively small brand like Lil Tomatoes too plans to open 50 stores in franchise format and they are eying north India market for its rapid growth trend.
According to Mr Rahul Sharma, GM-Retail, Lil Tomatoes, “Right now Indian or international, every brand is working on discount format/scheme by playing with their MRP. Nowadays customer needs quality based prices, so the brands whosoever adjust to this new trend will prevail in future”. Designer brands in kids’ wear are making their ways into the market. Kidology, a brain child of Neha Sachar Mittal, Ankur Mittal and Karina Rajpal, offers designer wear for kids designed by famous designers like Gauri and Nainika Karan, Mailini Ramani and Gaurav Gupta. The international brands Tommy Hilfiger and Burberry too are wooing kids with their high-end product lines.
Sales info (FY 2009-2010)
Brand Sales
Lilliput Rs 415 crore
Gini & Jony Rs 280 crore
Catmoss Rs 130 crore
Ethnic wear is the order of the day
The women’s wear market is about 80,000 crore (inclusive of the vast unorganised market), and the recent bend is definitely towards ethnic wear if we analyse the sales trend in women’s wear
For Max, the value retail chain from Landmark Group, and Shoppers Stop 25 per cent of sales revenue comes from women’s ethnic wear. Lifestyle is generates 20 per cent of its sales from ethnic wear. The international departmental store like Lifestyle which used to stock ethnic wear and western wear in 30: 70 ratio two years ago now has increased the share of women’s wear making the ratio 50: 50. The reason is the volume sales driven by ethnic wear in spite of consumers’ spending being 15 per cent more on western wear.
The fusion wear is the latest in thing in the market. A pair of jeans with matching kurtis, T-shirts with ethnic printed skirts, tunics with leggings is a common style statement for the today’s women. Shoppers Stop has witnessed a 50 growth in this segment in the last six months.
Also the segment, maternity wear, is gradually making its presence felt with rapid expansion. Mothercare from Shopper Stop and Mom & Me from Mahindra Retail are two such well-known brands besides Vanilla Place in Chennai, Green Bell in Mumbai or 9 Months in Delhi. Kids’ wear brand Lilliput has introduced the Mother Care line, which will be available at their large format store. Owing to its rapid growth, the segment has the potentiality to occupy 3 per cent of women’s wear market in the next five years. The maternity wear market has every chance to touch 1000 crore in three years for its rapid sales escalation. The market now stands at 30 crore.
Percentage of revenue generated by ethnic wear in FY10
Brands Percentage
Max 25%
Shopper Stop 25%
Lifestyle 20%
The bend is towards informal wear
In men’s wear market the recent trend is towards sports inspired casual wear, though the formal wear constitutes two-thirds of the country’s apparel market growing at an annual rate of 10-15 per cent. But growth rate is higher for casual wear. The trend has made the established formal wear brands like Van Heusen, Arrow, Allen Solly, Louis Phillipe to re-model their merchandise offerings. Sensing the demand in the market Allen Solly has the plan to double its casual wear share on the shelf which presently stands at 20 per cent. Van Heusen has introduced its casual wear line V Dot; Arvind Brands has a host of casual wear brands which constitute two-thirds of product portfolio. Shoppers Stop too has witnessed a remarkable 35 per cent jump in this segment in the last six months. Also as organisations get more liberal in terms of dress code, many sports wear brands like Adidas, Nike and Reebok have seen a sales hike.
Sales info for Q4 FY10
Brand Name Net Sales
Provogue Rs 155 crore
Madura Garments Rs 338.8 crore
Koutons Rs 385.39 crore
Arvind Brands Rs 550 crore
Raymond Rs 556 crore
SKNL Rs 991.7 crore
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