Fizz Apart, Fashion Biz Is About Sell-thru Innovation

New Delhi, April 28 | Updated: Apr 29 2004, 05:30am hrs
Beneath the fantastic fusion of fun, fabric and funky swank at the fifth edition of Lakme India Fashion Week lies a no non-sense business urgency: To remain relevant in the business of fashion, designers will have to look at an EBITDA (earnings) of upwards of 15 per cent, a faster stock turnover and strike a balance between design innovation and seasonal sell-thru of over 75 per cent.

Says Mr Aniruddha Deshmukh, vice-president (retail) of Raymond Ltd, which is driving corporatisaion of the nascent Rs 200-crore-a-year fashion industry with its pret retail initiative BE, said: One of the learnings in the fashion industry is that there has to be a lot of back-end improvement in seasons sell-thru. It is important that whatever we source gets sold in the same season. As a designer label one has to be innovative in bringing new range of fashion products and at the same time practical enough to maintain healthy seasons sell-thru.

Mr Deshmukh said that with its BE chain of pret outlets, the company has been able to increase its seasons sell-thru to 80 per cent in 2003-04 up from 60 per cent in 2001-02.

Mr Deshmukh added that BE was able to turn over the entire stock every 45 days. Across our entire chain, we are turning stock seven times over against four to five times a year ago. In key stores, the stock turnover level is as high as nine to 10 times, he added.

Be procures pret products from countrys well-known designers around 14 of these are showcasing their designs in the current LIFW. These include Gauri and Nayanika, Pooja Nayyar, Priyadarshini Rao, Rajesh Pratap, Ashish Soni, Rohit Bal and Krishna Mehta.

Mr Deshmukh said that BE was yet to make profits and that the pret chains objective was to meet the ideal benchmark in the fashion industry. As a return to shareholder, we should be looking at an EBITDA level of 15 per cent, he said. At JK Ansell (which makes Kamasutra and gloves), the EBITDA level has jumped from 16-17 per cent last fiscal to 26 per cent this year.

Designers feel that the entry of new consumer class led by media, advertising and entertainment executives has created a new demand for pret products. Also, pret lines are being increasingly embraced by male buyers. We are seeing a large number of regular buyers in 20s and mid-30s, who are rich with enough time to spend money. Men are getting receptive to pret lines their share has jumped from 20 per cent a couple of years ago to 35 per cent now.

Fashion designer Gauri, who supplies pret lines to BE and Circa besides her own New Delhi-based outlet Magnetic Rag: Most domestic and foreign buyers are looking for fusion pret. This season we are showcasing 25-30 designs in gowns and skirts with accent on bright and vibrant colours like gold and red.

Ms Gauri adds: We are getting enquiries from Singapore and other markets but it is the domestic market where our major thrust is centred.