Gokaldas Plans Premium Garment Mart Foray

New Delhi, Feb 26: | Updated: Feb 27 2004, 05:30am hrs
Bangalore-based garment exporting major Gokaldas Images has decided to enter the fast growing premium garment market with a couple of licensee brands in the next couple of years. The group has also thrashed out a major retail expansion strategy for its home-grown brand Weekender.

The group estimates the premium apparel licensing business in India to be around Rs 900-1,000 crore a year currently. Some major licensee brands in India include Arrow, Lacoste, Allen Solly, Lee Cooper, Pepe, Louis Phillipe, Van Heusen and Allen Solly. Arvind is all set to to launch Tommy Hillfiger shortly.

Says Govind Mirchandani, president and CEO, Weekender, Personality Ltd: We are talking to half a dozen brand-owners in the USA and Europe. Our plan is to add a turnover of another Rs 100 crore from two licensee brands in two years of their launch. The group (Gokaldas) already exports to the worlds top 25 apparel brands and we are talking to some of these as well.

Gokaldas is expected to complete the due-diligence in next couple of years. Mr Mirchandani, who is spearheading the groups debut in the premium licensee market, took over Weekenders operations 18 months ago. His earlier tenure at jeans and garment major Arvind during 1992-2001 saw the induction of licensee brands like Arrow, Lee and Wrangler, and also home-grown brands like Newport, Excalibur, and Ruggers; and relaunch of Flying Machine. Apparel-makers expect the premium-wear market to grow sizably as India emerges as the Next Generation economy.

The premium apparel market is addressed by a mix of international brands (which market in India directly through their manufacturing subsidiaries); international licensee brands (made by Indian firms on paying royalty fee); and leading manufacturer-cum-retailer like Raymond. Since the introduction of licensee brands entails an expensive royalty outgo, most Indian apparel-makers pursue two-pronged strategy: promote international licensee brands to address the high-margins, high-MRP premiumwear market (so that the royalty cost is recovered) while offer the low-margin, large-volume home-grown brand to crack open the mass market.

Meanwhile the group has chalked out plans to double Weekenders turnover to Rs 100 crore in four years with exclusive stores accounting for 50 per cent of overall revenues.

We plan to have an exclusive Weekender retail network of 90 stores (around 1,500 sqft area each) in four years. By march-end 2003-04, we will have a network of 60 exclusive stores (including 35 company-owned stores) in 30 cities besides presence in 40 departmental stores, said Mr Mirchandani. We will add another ten exclusive in 2004-05.

Like most consumer brands, Weekender has identified malls as the next retailing opportunity. It has already taken position in ten malls with exclusive stores in key metros and plans to add another eight exclusive stores in the malls next year.

Mr Mirchandani says that the group, which has 22 garment plants in Bangalore, has recently streamlined its procurement and manufacturing facilities.

At Weekender, weve rationalised the number of vendors from 15 to eight. Around half of the manufacturing is now done within the company, says he, and adds, wovens are done in-house while the knits are outsourced.

Around 50 per cent of our production is done in-house. Weekenders capacity is estimated at 1 million pieces a year.