The US sportswear brand plans to open 50 stores in the next three years, as the competition in the athletic-apparel-performance segment tightens.
Globally, New Balance has strong growth figures, with sales up 15-20 per cent in the last five years. Revenues hit $3.3bn in 2014 and the company was number 130 in America’s largest private Companies’ List of Forbes, beating even Nike in terms of growth rate same year. The US sportswear brand that has opened its first store in India at Noida’s DLF Mall, comes with a promise of strategic investments in sports marketing and a goal to open 50 stores in three years with Major Brands as an exclusive distribution partner.
In a candid interaction, Darren Tucker, Vice President Asia Pacific, Middle East and India said that the time could not be better. Especially since the brand has shifted its focus on its performance business in a bid to become more relevant to the millennial by shaking off its lifestyle brand meanderings. Some excerpts:
What do you think will qualify as short term challenges in India as a market?
As we roll out the brand, reaching out to good locations would be a priority for us. For New Balance the brand, it would never be about the amount of stores or how large the stores are, it would be about placing them at apt locations. We will start by launching primarily in Delhi and other metropolitan cities. The right location can give your brand the right balance. Secondly, as a brand we will always understand our consumers. If not done right, that could be one of the biggest challenges a brand can face.
The brand grew more than 20 per cent in 2014, with most of the growth coming from Asia, is that the reason of your opening stores here?
I think there could be a lot of reasons behind that. We had the benefit of the trend that supported towards the benefit of the brand’s growth in Asia. But I also think if you look at the brand for the last 7-8 years, we made some strategic investments in sports marketing, whether it is some of the Football teams, Tennis, Baseball and obviously Cricket. Not this market directly, but ultimately the goal of having that as a lynchpin for us to be part of the Indian launch. Those businesses independently do not really add up to the growth we have achieved, but the transfer from being a running-only brand into an athletic brand has helped us grow the brand across a lot many categories, hence, improving the overall scope.
You have behind your rivals when it comes to international businesses, even when you are a brand that started before most of them, what will be the turning point now?
We are completing 110 years in 2016. We are a private company and we do things for a different reason. Quite often, it is not just about straight growth, but more about strategic investments. And through those investments we provide focus, rather than being everything to everyone. We do not have to report it to the Wall Street of our stores in India and China, but do things that are right for the brand. We made a decision that we were ready to come into India. I think that led us to where we are today we built an asset through sports marketing, which certainly got us support from retail concepts, retail training, retail marketing and retail operations. I think we also have a great partner in Major Brands in India who are great retailers. It is never a right time to enter a competitive market. Major Brands are our exclusive distributors in India and Middle-east markets. And majority of our partners are long term partners. With our Japanese partners we launched in 1976 and they’re still our partners. So, it is not getting out as soon as things are working our way.
What is that area of your business that needs work most in India?
India is such a dynamic market. We do not need any sort of restructuring here. It is moving so quickly, I think eCommerce has set such a perfect example here. The general shopping habits have moved very quickly. That also would probably be the biggest challenge for a brand that operates globally and wants to be locally relevant to the markets. The markets have become much more global in the last decade. In the early 2000s, the brands were much more local, they didn’t really follow strategies, and I’d argue today that it is very different. Today, we have to compete with other global players almost daily.
How are you going to present yourself, a brand for the value-conscious or an elite brand and why?
We are going to present ourselves as a premium athletic brand with aspirations to be one of the top 3 globally-recognised brands. To be honest with you, I think we are almost already there. We just had a wonderful year and it is going to get better from here. We have got a good momentum behind the brand and I believe we are in a great position to capitalise that in India. Our primary target consumers would be athletes. We want active, loyal, brand-conscious people to be our customers and also people who follow fashion and want to look good.
Did India not form a part of your investment strategy in the last ten years?
We didn’t have the asset-base to be here. We had made strategic investment elsewhere which served as a distraction to enter the Indian market. Now that all the businesses are where they should be, we are ready to put all our energies here. I think timing has got a lot to do with it and ultimately, from the brand and investment point of view, I think we are ready to enter the market being relevant and to achieve the gaols we have set for ourselves.
How many stores are you planning to open in the next three years?
We are looking to have 50 stores in the next there years. A lot of that has to do with retail space. We do not want to open stores for the sake of opening stores. We want to put them in the correct space. We will re-access after a couple of years and look at where we go from there. We will also get into tapping distribution opportunities in Tier II markets, which eCommerce has opened up immensely.
What’s going to be your initial investment in this market?
We don’t really talk about our investments and revenue.
Talk to us about your most recent ventures into India sport vis-a-vis player, cricket team sponsorships etc?
We’ll start doing that in a while. We’ll use cricket as a communication platform to associate our business and brand with Indian public and Indian consumer.