By 2022, the company hopes to have 2,000 operational stores. Interestingly, two thirds of these will be located in the tier III, IV, V and VI towns, in the smaller retail format — The Mini Raymond Shop.
Raymond recently demerged its lifestyle business comprising branded apparel, branded textile and garmenting from its other businesses namely, FMCG, realty, auto components, and tools and hardware, to “unlock the potential of its textile and apparel business”.
The company has been trying to make the nearly-100-year-old brand more relevant to younger consumers. Apart from launching a ready-to-wear range, shoes, accessories and a premium service called Raymond Made to Measure over the last five years, Raymond has recently added ethnic wear and athleisure to its offerings.
The company has been rapidly expanding its retail footprint, claiming to open “nearly one store a day”. “We have doubled our retail footprint in the last five years, going from just 750 stores in 2014 to 1,500 stores today,” says Sanjay Behl, CEO – lifestyle business, Raymond.
By 2022, the company hopes to have 2,000 operational stores. Interestingly, two thirds of these will be located in the tier III, IV, V and VI towns, in the smaller retail format — The Mini Raymond Shop. These asset-light stores will be spread across 800-1,200 sq ft and will have “a well-represented fabric portfolio in both suiting and shirting, and a select range of readymade apparel,” Behl informs. The Mini Raymond Shops are currently operational in towns such as Dhar in Madhya Pradesh and Modasa in Gujarat.
Merchandising in the smaller stores will veer towards affordable price points. “The median price point for our products and services in the lower-tier markets is 10-15% below metros and large urban cities,” Behl adds. The company expects to earn `1-2 crore in sales from each of its small format stores.
Raymond’s other retail format for the smaller towns, Style Play, only houses its ready-to-wear apparel brands. These include Raymond Ready to Wear, Park Avenue, Parx, ColorPlus and Ethnix. Currently, there are 36 Style Play stores operating in small towns across the country. Behl hopes to double this footprint over the next six months. These stores are located in cities like Beed in Maharashtra, Bellary in Karnataka and Jhansi in Madhya Pradesh.
Taking premium to the masses
Raymond has thus far catered to the upscale consumer. Its decision to enter into readymades and athleisure, as well as its expansion plans in small towns, indicates the brand’s focus on volumes instead of value.
But Priti Nair, founder, Curry Nation, says it will be difficult for Raymond to shed its premium image built over many decades. “It is a classy brand that sells clothes meant for special occasions.” To pursue the volume game, which entails targeting the millennial consumers who tend to shop for cheaper clothes, “the brand will need to adopt a more casual approach to its positioning,” she adds.
Behl argues that there is a significant market for Raymond’s products in the lower-tier urban markets. He maintains that as the company forays into the interiors of India, it is “clear about our focus on the affluent and elite segment.”
According to Behl, in the bigger cities, an Indian male’s wardrobe is relatively more skewed towards readymade clothing as compared to tailored fabrics. “But in lower-tier markets, tailored clothes still occupy a large share of wardrobe,” he notes.
In these markets, Raymond will be pitted against unbranded apparel sellers, deeply discounted clothing sold on e-commerce platforms like Amazon and Flipkart, and brands like Arvind in the western formal wear space, Manyavar in the ethnic wear space and other multi-brand retailers.
Devangshu Dutta, chief executive, Third Eyesight, says it could be quite the gamble for Raymond. “A brand may have a national pull, but it may be unprofitable for the brand to go into smaller markets because there is no aggregation of demand there.”
Furthermore, offering multiple brands under one umbrella in a small town, says Harish Bijoor, founder, Harish Bijoor Consults, could result in the company losing focus on what it is selling. “It will be forced to sell products that the market demands,” he says, which could result in brand dilution, reduced price points and fewer offerings for the lower end of the spectrum.