New Stitch: Will Lacoste India’s Gameplan Work This Time?

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New Delhi: : Sports and Leisure Apparel Ltd (Lacoste India) is trying to sew up a new plan in the marketplace. For starters, the apparel and lifestyle company, which has exclusive licence to manufacture and market Lacoste products in India, will get fresh equity infusion from its parent group Turner Morrison, which has invested in companies like Barista and Arcus.

Says Lacoste India’s new CEO Vikas Gupta:‘‘The company has presented multiple options across multiple time-horizons to have sharper alignment with the board’s objectives. One of the options is to invest behind services and manage growth with an eye on the financial bottomline.’’

Says an industry observer: ‘‘When Lacoste entered a decade ago, the Indian market was not ready for it. But now when the market is ready, the brand’s limited product range, limited retail access, higher price points and inadequate advertising make it a difficult marketing proposition as it faces strong competition from MNC as well as local brands.’’

Declining to share details on the paid-up capital, fresh equity infusion and the extent of losses, Mr Gupta says the company has started paying attention to the efficiences of process. ‘‘Working captal management has improved with STR (stock turnover ratio) doubling in the last couple of months and receivables coming down to a sensible level.’’

Adds Mr Gupta: ‘‘Projected cash flows will be in control because of certain equity infusion. There will be a sharper focus on creating a new international in-store and brand experience, ensuring information flow, removing systemic inefficiencies, and managing cost of goods (CoG) and supply chain.’’

Lacoste India is aiming at 20-25 per cent topline growth in the current fiscal. But it is in the area of profitability that the company’s energies will be directed as the company suffered losses during the last two years.

Lacoste India’s new focus would, however, not result in price correction of garments downwards. Lacoste products, especially garments which account for 90 per cent of overall sales, are perceived as one of the most pricey products in the Indian market with shirts in the price bracket of Rs 1,100-Rs 2,200 and Polo T-shirts Rs 800-Rs 1,600.