After selling its consumer brands to Godrej earlier this year, Raymond Lifestyle has embarked on a massive transformational journey. The company’s CEO, Sunil Kataria takes Christina Moniz through the process aimed to reach younger consumers in a crowded market. Edited excerpts:
The company did well in FY23, registering a 19% top-line growth in the branded apparel segment. What is the road ahead after selling off the consumer business?
The past fiscal has been an action-packed year, and the brand has clearly bounced back from the pandemic impact, which hit all discretionary spending categories. Raymond is now undergoing a massive transformational journey and we are recalibrating ourselves to drive exponential growth. Our FY23 numbers are a testament to that.
Further, by selling our consumer business to Godrej, we have become completely debt-free. We have the leeway to fuel our growth aspirations with a different level of energy now. Our ambition is to double the Raymond lifestyle business over the next five years in a sustained, profitable way. There is a lot more to be done in terms of retail footprint expansion for our three power brands — Park Avenue, ColorPlus and Raymond Ready To Wear. These brands account for 60-65% of our business, and our plan is to increase the number of their exclusive brand outlets (EBOs). We currently have 300 EBOs across these brands, and we plan to take that number to 550-600 in the next couple of years. Ethnic wear is another big focus for us. The Ethnix brand is one of our newer businesses, and will have its own retail footprint. We already have 75 Ethnix outlets and plan to take this to over 300 stores in two years.
Raymond is perceived as an “occasion wear” brand. How are you creating relevance for Raymond and your other lifestyle brands across seasons and occasions?
Raymond is an intrinsic part of occasions, weddings and festive seasons. We don’t want to change that because it is the bedrock of our brand. However, while our customers often come to Raymond for suits, a large number also come to us for apparel such as shirts and trousers. So, they’re not only coming to us for special occasions.
Having said that, as part of Raymond’s transformation strategy, we are looking at various business pivots. Aside from retail expansion, we are also expanding our portfolio and introducing more casualwear offerings, thus commanding a larger share of the consumer’s apparel wallet. About 40% of the men’s apparel business is casuals, and we’re seeing that reflected in our customer preferences. Thirdly, while all our brands are strong, they need a refresh. We are in the middle of fine-tuning and refreshing our brand identities. You will see some campaigns from each of our brands soon.
E-commerce is another critical pivot in the Raymond lifestyle business. About 12% of our business comes from e-commerce and we want to take that up to 20% in the next couple of years. Therefore, building a stronger omnichannel presence is a key priority for us.
What steps are you taking to attract younger consumers who might not find your brands appealing?
Brands in the Raymond portfolio have seen great customer loyalty over the years. A brand like Park Avenue today has a great deal of equity, with a certain international appeal and is loved for its youthful qualities. ColorPlus, the brand that introduced chinos to Indian men, also holds good equity. But we need to do more by way of marketing and advertising to appeal to younger consumers. In terms of retail footprint, we haven’t yet reached a critical threshold and our expansion will largely be in the top 12 cities as well as tier-I markets in the country. We are working on attracting younger consumers in the 28 to 40 year age group, who appreciate good quality and are earning well. For the Raymond brand too, we are working on category development and are introducing more youthful imagery and attributes. It has a great asset in “The Complete Man” tagline, which we plan to reinvent in a way that resonates with younger consumers.
The market is flooded today with fashion wear brands and international labels. What steps have you taken to tackle growing competition?
If you look at our portfolio of brands, Raymond and ColorPlus are our premium brands, while Park Avenue plays in the mass premium segment and Parx caters to the mass market with more affordable prices. So across our brands, including Ethnix, we have enough to cater to a wide range of consumers.
India’s middle class and super rich class are both growing. So even if there is an influx of international labels and competing brands, there is still tremendous scope for growth. Unbranded apparel is still huge, around 40% of the market, which is where the growth opportunity lies. The shift from unbranded to branded fashion is a growing one, and that is the pie we are all targeting. New brands will only help the category grow further at double digits for the next few years. We haven’t yet reached a point where one can say that there is no more potential for growth.