Van Heusen aims to be India’s largest apparel brandFriday, 13 May 2011
To avoid the recently introduced excise duty on branded garments which creates a distinct possibility of price hikes of 10-15 per cent, the brand is looking at sourcing its products from neighboring Bangladesh and Sri Lanka as both countries have an FTA pact with India. Currently, Van Heusen menswear ranges from shirts, trousers, suits and blazers, knits and accessories, starting at a price range of Rs 1,199 onwards.
According to Ramachandran, the 2012 targets are being met head on. “We have been aggressively opening new stores across India. The company will open around 40 stores in FY-12, which would mainly be in Tier II-III cities. These cities are the next big thing to drive the brand’s growth in years to come. At present, 40 per cent of the brand’s Rs 650 crores annual turnover comes from their 120 exclusive stores, most of which are located in the metros and large cities.” Besides the 120 exclusive stores it also has 120 doors in Large Format Stores and around 600 MBOs. Every year they have been adding around 40 new EBOs most of which are in Tier
Also, to achieve their 2012 target, the management is considering expansion into footwear and other men’s personal products. All of these will come under the same brand name and would reflect the same sensibilities as the apparel line. All accessories and other related products will be retailed out of the current stores and channels.
Ramachandran cannot emphasize the importance of smaller towns enough. He says, “At present, around 70 per cent of the brand's turnover comes from the top 7-8 towns. Corporations like us have not given enough importance to penetrating deep into the market”. He pointed out that there is little headroom for growth in the metros, sales figure reported from smaller cities like Patna, Lucknow, Jaipur and Trichur are “mind-boggling”. According to Ramachandran, “The per sq. ft. sales is as good in the Tier-II cities as we have in the metros. Plus, the rentals are lower by at least 50 per cent. Looking at this trend, Tier-II cities expansion would be the key focus for the brand.” Ramachandran is very confident with his homework about achieving the objectives. He said, “The brand’s current turnover is at Rs 650 crores at MRP and would jump to Rs 850 crores next year. In the next three years Van Heusen would be the largest retail and apparel brand in the country with a turnover of Rs 1,300 crores plus.”