Seeing the potential growth for branded outerwear apparels post GST, Lux has launched active wear in the mid-premium segment under the brand ONN. With this move it can be anticipated that the company will strategically and steadily focus more on ONN from its economical brand Lux Cozi along with planning to expand its number of EBOs to 20 across western and northern region of the country. Thus, revealing the company strategies on the occasion of launching active wear in Mumbai, Rahul Kumar Todi, Director, J M Hosiery & Company Ltd. spoke to Indianretailer.com.
With introducing outerwear under ONN, what is your retail expansion plans?
Presently we have seven company owned ONN exclusive outlets and planning to take it to 20 outlets this year. All these remaining 13 outlets will be largely into metros like Kolkata, Delhi, Mumbai, Ahmedabad and Banglore because ONN is easily sold in metros. In future, each state will have around 10-12 stores. Each store will have 500-700 sqft of area with an investment of minimum around Rs 20- Rs 22 lakh.
Amid GST why you planned to launch outerwear under ONN?
If you see, there is no proper brand in the outerwear as it’s an unorganised market. We found that there is a big market scope where we can place ourselves in the mid-premium segment with our own brand. At the same time the brand ONN is reaping new success, so we planned to come into high quality outerwear rage. Also when GST will come, the unorganised sector will have a big hit and we will get the big share of market with great success. And that’s why we have planned to launch all active wears in ONN series. We are placing ONN as a mid-premium brand for 18 to 30 years old men.
Is it that the company is shifting its focus from the core brand Lux Cozi to ONN?
No it’s not shifting! Still our mother brand is Lux Cozi where we are not lacking with our concentration. Just to capture more market share we are right now focusing on ONN and we feel like we can give boost to our sale. Lux Cozi is economic innerwear brand so we will not be able to get mid- premium segment. Hence, to bring something into mid- premium segment we require a new brand so that is why we introduced ONN as a new brand. ONN is existed in the market for the last five years, but now we have re-launched it with active wear range where we are introducing fashionable sports and active wear apparels. It is going to give us a big market share as there is no organised brand in the market. Thus, the branding of Lux ONN will give us a big image.
What are your expectations from GST?
With GST, we are looking for a better future with a big market share. Right now 50 percent hosiery market is ruled by unorganised players and they will face a big impact after GST because everything is moving online and point- to- point GST has to be applied. In the first year of implementation of GST there will be little trouble because people will not accept GST the way it is coming. It will give little slowdown to the market for the initial months, but the whole year will be good.
What is your simultaneous focus on the brand Lyra?
We have started the brand for leggings and in January this year we have launched bra and lingerie. The legging business is growing by 50 percent a year and currently commands a market share of 38 percent in the mid to premium segment. Next year we will be launching outerwear under the brand.
How do you see the competition in the market and what is the total share of Lux and ONN in India?
It’s a very tough market. The ladies segment is little tough for us, we are new into this segment, but we will get success because we are master in hosiery. Lux has almost 20 percent market share. ONN has done Rs 100cr plus turnover last year and it is growing by 10-15 percent. ONN market share is in single digit and we are expecting the double digit growth in future. May be five years down the line ONN will be 600-700 cr turnover brand.
Recently we have done an investment of Rs 100cr plus in the Dankuni, West Bengal plant which produces the 1.4 mn pieces a day. Overall we have increased our production capacity to 2.2 mn pieces a day. The total active wear market in India is Rs 2400 crore.
How is been your growth with exports?
Our export was of Rs 120cr last year and we are expecting good growth in the coming future. We are the number one brand in African market with our brand Lux Premium, while exporting to 16-17 countries right now and going on increasing it. This year we have taken Australia as a challenging market in the premium segment. Around 10-12 percent of our total turnover comes from export.