\"Gap could be a 1,000 crore opportunity over 5-6 years\"

J Suresh, MD and CEO, Arvind Lifestyle Brands believes that the quality of retail will undergo a change.

The American clothing and accessories giant, Gap enters India with Arvind Lifestyle, a subsidiary of Arvind Ltd. J Suresh, Managing Director and CEO, Arvind Lifestyle Brands Ltd believes with the launch of the brand the quality of retail will undergo a change. While it is an exciting growth opportunity for Gap in India, the local expertise Arvind Lifestyle gets to the table, in terms of the real estate support and the group’s overwhelming presence in the fashion space can strengthen the position of the California label substantially.

Retailer caught up with J. Suresh to talk about the association, store-wise investment and the comparison of the times when Arvind partnered with Arrow in 1993, some two decades ago, to Gap in 2015.  

Some excerpts.

Talk to us about the association with Gap Inc.
This is a franchise association where we will open Gap stores in India. As far as the clothing brand Gap is concerned, we will be running their entire business for India. 
How is your brand Arvind different from what it was at the time of inception?
The brand Arvind of today is quite different from what it was. It was largely into Business-to-Business space, but if you look at us now we are more of a Business-to-Consumer firm. Out of the Rs 8,000 crore turnover of Arvind, 30-35 per cent comes through our consumer brands.
I also firmly believe that the company has a great heritage in fashion and the inclination toward lifestyle and clothing is a natural extension to reach the customers with latest offering in the fashion space. 
Talking about fashion, you have had some successful associations that have helped you get global fashion to the country. How has been the journey?
We have a great strength in getting global brands to India because some of our relationships with them go as much as 20 years. We were the first ones to bring an international brand to India in 1993. 'Arrow' was the brand. From Arvind's perspective, I would say we are quite good in getting international brands and making them grow here.
You've brought Gap in 2015. How are the two phases different?
It's quite a different time frame but it was not difficult as such. More importantly, every brand has its own time to come to a country and we are at the right time to get Gap into India. 
How good is the franchising model behaving in terms of growth and opportunity, especially in terms of your recent association with Gap?
It is as good as running your own business. Gap is a great partner and they believe that the two companies have similar values, so I think it is going to be a great partnership.
What is it that you are looking to invest in each new store?
We are looking to invest around Rs 10 crore in each store. If we do 40 stores, it will be anything between Rs 300-400 crores and this includes the capital, the expenditure as well as the working capital.
Any strategies you are adapting to ensuring Gap's success in the market?
Gap has the advantage of a well-known brand. On top of it, we are actually investing quite a lot in marketing and promotion activities. Some of them are already around the mall (Select CityWalk, Saket) and we are going to aggressively market it. 
Further, currently we are just talking about one store, which is opening now. Hopefully, by the mid of next year we should have at least 10 stores. And moving further, it will be 40 stores in four years.
J Suresh