The Rs 500 cr Club: Select brands to touch the mark

The year 2011 proved negative for apparel retail with various factors like excise duty on branded apparel, increasing raw material costs, signs of another economic slowdown and customers tightening their purse strings. Most retailers had to adapt

various strategies to keep the sales registers ringing and to manage the day to day operational costs. While most of brands still continue to reel under pressure, there are few, who managed to score well during the difficult times.

According to Booz and Co, four apparel brands, belonging to diverse product categories – United Colors of Benetton, Nalli and Fabindia are expected to exceed Rs 500 crores in revenue by the end of this fiscal in March. Their efforts to expand into untapped territories and categories hint at the maturing of the organized retail business in India. These brands remained positive and went ahead with their expansion plans exploring territories beyond metros.

Madura Fashion and Lifestyle, the lifestyle garments business of Aditya Birla Nuvo, which has the largest portfolio of Rs 500 crores brands—Van Heusen, Louis Philippe and Peter England— carried out their expansion plans as they diversified to become lifestyle brands. For instance, Van Heusen, a men’s formals brand, now has a casualwear range, VDot and a women’s wear range. Van Heusen and Louis Philippe have tripled their footprint from 40-50 stores to 120-150 each in the past three years. Peter England has scaled up from 200 stores three years ago to 500 now. US Polo, an American brand also expects to touch Rs 500 crores revenue within five years. The brand launched in India in 2009 and expects to close the fiscal 2012 with revenue of Rs 160 crores.

Though the existing Rs 500 crores brands such as, Van Heusen, Louis Philippe and Peter England, the core brands from Madura Fashion and Lifestyle achieved breadth as operations were expanded and they diversified to become lifestyle brands, it took 12-15 years or more to achieve this scale, New Age younger brands will need lesser time with quality management, a positive attitude and strong brand portfolio. Today’s consumer is more concerned about the value that he would get for spending on a particular product and it all boils down to the fact that brands need to pay attention to building a quality brand instead of pinning their eyes on generating revenues.