RSH looks for big game: Plans move into distribution, manufacturing

Pummy Kaul in New Delhi

A little over one year into the country, Asian retailing major the $500-million Royal Sporting House Group (RSH) is going beyond retailing of top sports brands into the country. The company is now eyeing volume-driven business of distribution of a range of sports, golf and active lifestyle products to other retailers/wholesalers on an exclusive basis.

Royal Sporting House products on display at Shoppers’ Stop outlet in New Delhi

For this, the RSH Group through its Indian franchisee SSS Sports Pvt Ltd has opened a new company called RSH Distribution (India) Pvt Ltd which will solely look into the distribution and supply of select brands to wholesalers in bulk, Mr Bhupendra Nagpal, CEO, RSH Distribution, told The Financial Express.

The company plans to bring in new brands including Catter Pillar, Dunlop, New Balance and others through this route. While the test-marketing of the American lifestyle apparel brand Catter Pillar will begun in November, the formal launch of other brands will follow.
Explaining the rationale behind running distribution along with retail business, Mr Nagpal said, ‘‘Distribution per se has a bigger market potential and through the RSH platform it’s practically not possible to reach out to large numbers.’’

According to Mr Nagpal, in India the overall Rs 300-crore sports and active lifestyle products segment is overshadowed by consumer preference for fun and leisure sports and fashion-oriented sports apparel and hence distribution of such products through other stores makes sense.

In the long run, the company is also considering contract manufacturing of garments through third party manufacturing in India for brands such as Catter Pillar and others.

Meanwhile, the company on Wednesday announced its alliance with retail chain Shoppers’ Stop to provide sports and active lifestyle products. ‘‘The alliance is a step to consolidate the retailing of sports and active lifestyle brands. With this alliance the sports and active lifestyle products at all Shoppers’ Stop locations will be under the banner of Royal Sporting House,’’.

The alliance, hopes Shoppers’ Stop CCA & CEO Mr B S Nagesh would help the store to increase its sports and active lifestyle category sales increase by 50 per cent in the next one year. The category currently, claims Mr Nagesh, was yielding three per cent sales. RSH, on the other hand, hopes to achieve a sales turnover of Rs 7 crore from the Shoppers’ Stop alliance though it expects to close the current financial with a sales turnover of Rs 12 crore and Rs 300 crore by the end of 2002-03.

RSH which opened its first retail outlet in the country at Ansal Plaza in New Delhi in November 2000 plans to open four new outlets in the current year. It is currently present in eight cities having 13 outlets across the country.

The RSH Group is primarily involved in retail, marketing and distribution of over 30 top international brand names in sports, golf and active lifestyle products in more than 29 countries including Singapore, Malaysia, the Philippines, Hong Kong, Brunei and the Middle East.

The Group’s retail network includes more than 650 retail stores and shops-in-shop. Its retail concepts include chain stores such as Royal Sporting House, Golf House and Pro Shops, as well as specialty stores like Stadium by Royal Sporting House, Studio R, Reebok, Nautica and Lacoste.

The RSH Group, globally, derives most of its revenue from retail sales and distribution of sports, golf and active lifestyle products. Its retail and distribution sales accounted for 74 per cent and 22 per cent of revenue during the year ended March 2000, respectively.