With the entry of foreign brands like H&M and Zara, Arvind Lifestyle Brand and Retail is expanding its stores, especially of brands like Aeropostale and GAP, whose franchise it holds in the country
With the entry of foreign brands like H&M and Zara, Arvind Lifestyle Brand and Retail is expanding its stores, especially of brands like Aeropostale and GAP, whose franchise it holds in the country. It has also re-branded its Megamart stores as Unlimited selling its own brands, which also includes premium brands. J Suresh, MD & CEO, Arvind Lifestyle Brand and Retail tells FE’s Hita Gupta about the strategy for Unlimited and omni-channel distribution via its online arm – Arvind Internet (nnnow.com). Compared to e-tail players such as Jabong and Myntra, Arvind seeks to operate its online platform as an extension of its brick and mortar stores for customised solutions. Currently with 1,300 stand-alone store the company is looking at adding 200 stores every year. Excerpts:
How are you re-branding Megamart to Unlimited stores?
Two years ago we started with the transition and moved from discount-oriented Megamart to Unlimited where the focus is more on value fashion. For the first year and a half we wanted to see how the India concept is taking of and after we were able to establish the model we started expanding on Unlimited towards the later half of last calendar year. We price the product on value rather than high price with discounting.
We have created a format where the footprint of store is about 10,000 square feet with an equal representation of men, women and kids. This is different from earlier Megamart which was more men-focussed.
Unlimited also gives us better profitability because it is largely driven by our own brands. We had almost 200 stores under Megamart and converted 40 of them into Unlimited. In next one year we will be opening 40 more store under Unlimited. We are looking at `1,000 crore revenue from Unlimited this year.
Will you be looking at expanding your brand portfolio?
We have a fairly large portfolio with 15 international brands and are currently looking at consolidation rather than adding something new. We have a huge base to scale up and the focus is there. In 2015 we launched brands such as GAP, Aeropostale, and Sephora. In 2016 we did not launch anything new and saw consolidation. This year too we will not be doing any new launches and scale up our current portfolio. US apparels contribute about 30% to the total revenue of the company.
What is your strategy for online expansion via Arvind Internet?
We are an omni-channel platform vis-a-vis a pure online. We will go online but the experience that we will be focussing on will be around pick and collect. The customer can go to the store, find their size and order it online, which will be delivered to them. We will look at getting more information about our consumer and then customising our offers accordingly. Our online focus will be more on these areas than discounting and selling like a typical e-commerce website. Consumer behaviour suggests that contribution of online sales to total revenue will go up. Online sales should touch 15% in two years time from 10% currently.
Which brands are leading the growth?
On the online platform, brands such as US Polo, Arrow, Flying Machine, Aeropostale and GAP are doing very well. On an overall level, the larger brand are Arrow, US Polo and Flying Machine which contribute about 50% to the company’s revenues. At Unlimited, we have moved away from selling other brands at a discount to selling our own brands.