“The main problem with retail is cost”

Font Size

Print

Feedback

Email

Discuss

Related Articles

Gold the most preferred investment

: they see the fashion and trends in developed countries and aspire to own them. Added to this is the presence of the international media, which is a big promoter of fashion and trends.

The purchasing power of people has also shot up and they don’t mind pampering themselves with clothes and accessories. The regulatory environment has also encouraged the influx of well-known international brands that have raised the bar in fashion.

An ASSOCHAM study puts the retail market at Rs 1,60,000 crore by 2008 and garment retail is said to be the biggest contributor. How do you rate the prospects for this industry?

The prospects of garment retail are good. Organised garment retailing has just taken off over the last couple of years and has a long way to go. With the growth of the economy and the resultant increase in the income levels of people together with a growing young population ready to spend more on garments, the future looks bright.

There is a growing demand for brands at lower prices. What impact could this have on ABG’s brands that mostly target an upscale buyer?

Our brands are present across different customer segments, ranging from super-premium, premium and mid-priced segments. Each of these is growing fast and all our brands are benefiting from this growth. The customer segment at the lower price range may have grown faster but we have not seen a slowdown of demand from upscale customers. Given the rise in affluence levels, we expect multifold increase in the demand for our brands.

Apparel companies are pushing specialised retailing concepts these days. Are there any pitfalls in pursuing an ambitious retail plan as far as a manufacturer is concerned?

The main problem with retail at present is the cost. Rentals have risen exponentially within a short period, which will, willy nilly, impact the bottomline. Having said that, the only way to grow a brand is through a focused retail push.

Another raging issue in the business is the use of promotions—be it outright discounting or freebies. Everyone admits that it undermines a brand’s value and may be dangerous for the industry as a whole. What is the way forward?