Carter's to contribute towards Mahindra retail growth

Mahindra Retail has introduced US’s children’s clothing, gifts and accessories brand Carter’s in India. On the occasion of the launch Prakash Wakankar, CEO, Mahindra Retail spoke to Indianretailer.com.

 Is it a joint venture between Mahindra Retail and Carter’s?
It’s not a joint venture. At the moment this is a buy and sell arrangement. We have structured it as partnership of which commercial transaction is purely at this stage will begin with straight forward buy and sell arrangement and not the revenue sharing model.
We are doing things in a manner true to the Carter’s experience in the world, which means it’s not about buying X number containers and selling wherever and however we want. They would be sold through the same fixture figments that are there in any Carter’s store in the world. Hence, Carter’s will have significant contribution to the overall growth story of Mahindra Retail.
In India Carter’s is also available on Hopscotch.com.

Why carter will be available only in 40 stores of BabyOye out of 110?
There is no real reason for this question. But, we have begun by keeping in mind our store capacity, store ability of execution and excellence. Initially Carter’s will be available in 40 stores across 15 cities namely Ludhiana, Ahmedabad, Pune, Coimbatore among others. And the brand will hold 250 sqft of area in each of the stores.

 What about product portfolio, target age group and pricing?
The Carter’s will offer a range of baby essentials, gifts and sleepwear along with easy outfit sets and fashion collections in colorful prints and cute characters. In the store, for 0 to 7 months old infants there will be spring summer 2016 collection. We are focused on sweet spot, which is 0-2 years old. Beyond 2 years the product is available both on BabyOye.com as well as our mobile app. Also we have created a special microsite for Carter’s to remain true to the Carter’s brand and to provide variety that’s possible. The price range of these products starts from Rs 600 to Rs 2500.

How Carter’s store-n-store offerings will be aligned with BabyOye products?
Where there is Carter’s SIS (store-in-store), the price laddering has been arranged in such a way that BabyOye will be available in those stores with different price points, so it isn’t direct competition. Even if there is some range that overlaps, it would be mother’s choice what she wants for a child, ultimately providing choice to the mother is the business we are in. Our job is to offer all price range of products and finally it will be consumers call. We don’t see any challenges.

Will this US based brand be manufactured in India to reduce the cost?
Presently the brand is manufactured in China, Cambodia, Bangladesh and Thailand. In the past the brand has sourced products from India so it’s possible that it could do it again in the future.

Ahead will Carter’s look at exclusive outlets for the wider consumer experience?
In a year or so Carter’s would like to have four wall store (EBO) and that’s something which would evolve with this relationship. Apparently these stores will necessary be in cities like Delhi, Mumbai, Hyderabad and Bangalore.   

And how much Indian market will add to the growth of Carter’s?
Initially with just 40 shop-in-shop it’s would be just small addition to its growth. Over the time India will be the significant market for Carter’s. Potential of the Indian market for Carter’s is very high.

Why BabyOye stores are not located at accessible locations? Why famous malls like Infinity or Inorbit are left out in Mumbai? Is there any reason that the company is not investing in retail positions which are premium?
The day if I can sell Rs 50,000 shirt I will go to famous places like Palladium. By end of the day the economics has to work. The challenge of location will continue for the retailer like us. There is also a reality of where that mother shops.
Choice of being able to get the right store at the right price in the right location is something that we are constantly on the lookout for.
Soon you will find newer formats emerging, more digitization coming in and don’t be surprised if you start seeing some pop-up stores of ours coming up over the time which will be in these malls where we can’t get right kind of space but we can be present on weekend where we can demonstrate our products with digital connect.

What are your expansion plans ahead?
In this fiscal we have added about 25 stores. Between now and March we will add another 15 stores, so by the end of this fiscal we will have no less than 125 stores. Presently we have 110 stores in 52 cities.
We have 32 franchised stores and the rest are company owned. The ratio will continue to move pretty much in the same proportion though we might see early rise in franchise stores. By the end of 2016 we will have around 50 franchised stores. 
Overseas- We have opened our first international store in Mauritius on franchise basis. Henceforth we are exploring opportunities for Middle-East, Sri Lanka, Nepal and Bangladesh and one day we will go to Pakistan too.

What’s online expansion plans?
We have revamped the website, launched the mobile app and in less than three months of launching of app we have exceeded 1,25,000 downloads. Our average transaction value on the app is growing and its increasing traction both on iOS and Android platform. We have added products, now there are around 12,000 products on our website many of which will not be available in the store.

How do you see the competition from FirstCry?
Though FirstCry is our competitor its offerings are very different. FirstCry is a venture capital company. I think the market is so large that there is some time to go before we start talking of competition in the real sense.

What is a present turnover of BabyOye and what is the target that you are looking forward?
Last year our target was to reach Rs 250 cr of revenue and we are going to hit Rs 220 cr this year.

Are you making cash (profit)?
Presently, not internal accrual to Mahindra Retail, we are not making cash.
At this point of time we envisage getting the parental support (Mahindra Group) in terms of funding and investment as we build out. The bulk of our investment is capital in our nature this year. In the last 18 months or so our investment is going into fixtures, Carter’s investment, BabyOyes operations of omni-channel as well as the acquisition of BabyOye.

When do you expect the break-even?
No comment.