Inditex to launch Bershka and Zara Home in India this year

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April 15, 2024

Sagar Malviya, Economic Times
Mumbai, 15 April 2024

Spanish fashion company Inditex said it will launch youth clothing brand Bershka and Zara Home in India this year.

“Bershka will open its first store in Mumbai Palladium, and Zara Home will open in Bangalore,” it said in its latest annual report.

Inditex had launched fast fashion brand Zara in 2010 and premium clothing brand Massimo Dutti eight years ago. Its new offering, Bershka, will pitch it directly against Reliance Retail’s Yousta, which too targets the younger consumer segment.

Being the world’s second most-populous country, India is an attractive market for apparel brands, especially with youngsters increasingly embracing Western-style clothing. Fast fashion brands such as Zara and H&M became runaway successes soon after they entered the country.

Experts said Bershka’s target consumer profile is mostly teens to mid-20s, slightly younger than that of Zara, which is pitched at 20-40-year-old fashion-driven customers.

“The product assortment is different, with a higher share of knits, fewer dresses and more casual overall compared to Zara, keeping in line with the lifestyles of the customer group. So in that sense it wouldn’t cannibalise Zara in any serious way, though some of the younger set among Zara buyers could migrate some of their purchases to Bershka,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight. “The biggest question is, can they hit the price points that young Indian fashion consumers want as with domestic brands such as Zudio, Yousta and others, or will consumers overlook higher prices for the style mix and a European brand pull in significant numbers to make the brand viable.”

According to a recent report by Motilal Oswal, the ₹2.5 lakh crore value fashion segment accounts for 57% of the total apparel market and is one of the largest and fastest-growing segments. A substantial untapped opportunity beyond the metros and tier-1 cities, driven by better demographics, higher incomes and greater customer aspiration, has compelled several big players to enter a market that was previously dominated by regional and local operators.

Since its inception in 2016-17, Zudio has seen considerable expansion and reached nearly 400 standalone stores, outpacing most apparel brands primarily due to its competitively priced products with an average selling price of ₹300. Following the success of Zudio, a unit of the Tata Group’s Trent, the segment has seen the entry of national retailers in the affordable youth clothing segment such as Yousta by Reliance Retail, Style-Up by Aditya Birla Fashion and Retail and Shoppers Stop’s InTune.

(Published in Economic Times)

Fashion 2024 & Beyond: Adapting to Changing Innovation Dynamics (VIDEO)

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February 21, 2024

The ability of fashion businesses to endure and thrive in the face of stiff competition and changing market dynamics is all about adapting to innovation, customer-centricity, and strategic planning. The correlation between high performing fashion business and product innovation is undeniable.

This panel discussion brings Design and Business Heads together to brainstorm on how fashion companies can devise strategies to drive innovation to remain competitive, meet evolving consumer expectations, and stay ahead of the race.

Moderator: Devangshu Dutta, Founder & Chief Executive, Third Eyesight

Panelists:

  • Anshu Grover Bhogra, CBO, Forever New
  • Diksha Bhatia, Founder, Gioia Co
  • Mansi Lohia, CEO, Black Watermelon
  • Rohit Aneja, Director- Grapevine Designs, CEO be-blu! Lake Como
  • Sean Ashby, Founder & CEO, Aussiebum
  • Swikruti Pradhan, Founder, Rustic Hue
  • Yogesh Kakar, Chief Product Officer – Tommy Hilfiger & Calvin Klein, PVH Arvind Fashion

Venture Capital in Retail – What Attracts Investors to Retail Business (VIDEO)

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February 15, 2024

An insightful must-watch discussion, moderated by Devangshu Dutta (Founder, Third Eyesight), with venture capital fund managers, investors and entrepreneurs in retail on what factors attract investors to retail businesses.

The panelists included Vikram Gupta (Founder & Managing Partner, IvyCap Ventures), Amar Nagaram, (Co-Founder, Virgio), and Vikram Gawande (Vice President, Growth, Blume Ventures).

A new flight plan

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November 20, 2023

Christina Moniz, Financial Express

November 20, 2023

he country’s largest airline IndiGo just announced the launch of a premium luggage range in collaboration with actor Deepika Padukone-backed lifestyle brand Mokobara. The new luggage collection, Moko 6E, offers a check-in bag and a cabin bag in the signature IndiGo blue.

IndiGo has sweetened the deal for its passengers, offering customers an extra 2 kilos of baggage allowance for one year after purchase at no additional cost. With a starting price of Rs 9,999 and a six-year warranty, IndiGo says it is looking to reach more discerning consumers who travel for business or leisure.

The airline already enjoys a substantial share of over 60% in India’s domestic civil aviation sector as per DGCA data. So why is it making its way into the Rs 50,000-crore luggage market in the country? According to an IndiGo spokesperson, the aim is to leverage the carrier’s strong brand presence to target modern Indian jet setters and create a seamless travel experience.

Vejay Anand, CEO, Ironhill India, points out that balancing creating a new identity for the luggage line while leveraging the well-established airline image without diluting its core values will be a delicate task. “This venture was more than a market expansion; it was about intertwining their brand heritage with travellers’ lives, ensuring passengers carry the airline’s reliability beyond flights,” he remarks.

Navigating the market

Although the luggage market is huge in the country, industry reports estimate that the organised and branded segment is around 40% with players like VIP Industries and Samsonite taking up the lion’s share. Devangshu Dutta, CEO of Third Eyesight notes that rather than the potential quantum of business, it is more relevant to see a brand collaboration such as this as helping both companies create a buzz in the market. He observes that there is some degree of resonance in the design philosophies of both brands, pitched largely to millennial consumers.

Ambika Sharma, founder & MD of creative digital agency Pulp Strategy, observes that the carrier’s decision to enter the luggage segment could offer several advantages for IndiGo the brand. “Expanding into luggage provides IndiGo an opportunity to showcase its brand beyond the airline industry, strengthening its overall brand image and positioning it as a lifestyle brand. Offering a branded luggage line can enhance customer loyalty and engagement by providing travellers with a convenient and consistent travel experience,” says Sharma.

She however adds that making a mark in a competitive market with established players will be a challenge for the company. She cautions, “Consumers may not immediately associate IndiGo as a luggage brand, requiring significant marketing efforts to establish brand recognition. Creating a unique selling proposition that distinguishes the Moko 6E luggage from competitors is crucial. Effectively managing logistics and supply chains is critical to ensure timely product delivery and customer satisfaction.”

That said, India is a predominantly price-sensitive market where prominent brands sell luggage for as low as Rs 1,999, the brand may eventually have to revisit its pricing strategy if it has to compete with established players. “By offering a range of pricing options, IndiGo could cater to a wider set of consumers, potentially appealing to different market segments. This would ensure a more comprehensive market penetration while retaining its premium positioning,” states brand expert Anand.

With this association, the collaborator brand, three-year-old Mokobora, a premium travel and lifestyle brand established as recently as 2020, could also get a leg-up in terms of both visibility and accessibility. Anand notes that the lifestyle brand will, through this collaboration, be able to reach out to an audience of about 3 lakh or more air travellers in the country every day.

As of October this year, IndiGo has over 2,000 scheduled daily flights which include cargo operations, as well as CAPF and Army charters, allowing Moko 6E to reach a significant number of travellers daily.

(Published in Financial Express)

100 years of Sabyasachi? The fashion designer’s quest for legacy

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November 17, 2023

Smita Tripathi, Business Today

17 November 2023

“I don’t care about being No. 1 or No. 2. I don’t care about how much money I’ve made today, or how much money I’m going to make tomorrow. I think you are successful as a business if you last. Because when you’re trying to create a business, what is important is longevity,” says Sabyasachi Mukherjee, arguably the leading fashion designer in the country.

It is a sultry September morning in Kolkata as we interact with a relaxed Mukherjee—dressed in his signature white kurta-pyjamas and self-designed black sleeveless jacket (he made a guest appearance recently on Season 2 of Amazon Prime Video’s Made in Heaven with the same look)—at his beautiful home in Alipore, a tony locality in the City of Joy. The interiors, which ooze his signature baroque style, are an extension of his personality, which is also reflected in every Sabyasachi store. Mukherjee has tastefully decorated his abode with beautiful curios from around the world. Just like in his stores, the interiors of his home exude class and grandeur.

Billionaire Kumar Mangalam Birla-led ABFRL has bought 51 percent stake in Sabyasachi. Experts believe that ABFRL and Mukherjee complement each other well (Photo Credit: Business Today)

Mukherjee reveals that a few years ago, he was going through the anniversary issue from the 1930s of a leading fashion magazine. “I saw a small ad that said we are now open for business on Bond Street. It was for Tiffany’s. There were other larger ads for bigger brands from that time. But I don’t remember them. I remember Tiffany & Co. because it lasted and the rest of them just evaporated. And I said to myself that I’ll try my best that doesn’t happen to mine,” says the 49-year-old, who has come a long way since setting up his eponymous label in 1999 with a workforce of three, having borrowed Rs 20,000 from his family.

Over the past two decades, Mukherjee (or Sabya, as he is popularly called) has dressed Bollywood royalty (read Deepika Padukone, Anushka Sharma, Priyanka Chopra, Alia Bhatt), heiresses (Isha Ambani), models, and hundreds of brides across the world. Being a ‘Sabyasachi Bride’ has become a cultural phenomenon that has established the brand as a leading design house.

But Mukherjee doesn’t believe in resting on his laurels. It is the next 20 years that he is planning for. “I want to be India’s first global luxury brand.” And he is working towards it slowly and steadily.

Designer Sabyasachi Mukherjee’s flagship store in Mumbai. Launched in March this year, it is his largest flagship store yet. Spread across 25,000 sq. ft, it is housed in a majestic neo-classical heritage building at Horniman Circle (Photo Credit: Business Today)

Over the past few years, he has launched his jewellery line as well as accessories. The brand now offers ready-to-wear western wear and he recently entered into a collaboration with US luxury eyewear brand Morgenthal Frederics to launch his range of sunglasses. On the cards is a beauty and wellness line that should launch in a few months. Last year, he opened a store in New York; he had a window display of his jewellery at the Bergdorf Goodman store in Manhattan; and his clothes and accessories will be available at top luxury departmental stores like Selfridges and Browns in another couple of years. In March, he opened his largest flagship store, at 25,000 sq. ft, in Mumbai. “I have spent the last five years growing the brand and making it visible. If this country cannot occupy a position of power in the luxury industry, then shame on all of us. Luxury has been a part of our ecosystem,” he says.

Keeping in mind Mukherjee’s two goals—longevity and global growth for the brand—he sold a 51 per cent stake to Aditya Birla Fashion and Retail Ltd (ABFRL) in 2021, reportedly for Rs 398 crore. “Nobody in my family is interested in my business, I don’t have children, and often a mistake that many entrepreneurs make is that they don’t let go of control at a time when they should, so that they can build tomorrow,” says Mukherjee. “But what I want to do—while I’m still in my prime and I still have full control over my company—is to use the next 20 years to [plan for] tomorrow. I want to create my second-in-command; I want to create a succession plan. So that [brand] Sabyasachi does not go down with me; it deserves a much longer shelf life,” says the designer who broke the rules by signing out of fashion weeks in India and launching his collection directly on Instagram in 2016. It’s a practice the brand continues with the latest Autumn-Winter 2023 collection having dropped on Instagram in mid-September. “Why bother with front row politics, when the world can be your front row,” he says.

As he continues to grow, Mukherjee has not forgotten his middle-class roots. His father was the son of a refugee, raised by a single mother. He was a chemical engineer who worked in a jute/wool mill that shut down and he lost his job. “My father gave maths tuitions, my mother taught art and I taught English as a teenager to make ends meet,” he says, adding there was a time when he didn’t want to go to school because he was traumatised with the privilege that his friends enjoyed. “I once saw my father crying while standing next to the kitchen sink. And I realised that’s what money does to you. It brings you to your knees and strips you of your pride. I felt the same helplessness during Covid-19. I was responsible for all these people,” says Mukherjee. However, after a conversation with his CFO, the designer was relieved to know that they could survive for three years and as a result, no one was let go.

Mukherjee says he had been in talks with billionaire Kumar Mangalam Birla, Chairman of the Aditya Birla Group, for a few years before Covid-19 and it was his decision to sell the majority stake to ABFRL. He says he wanted to work with Birla for the way he has treated his children. “I think it takes a very wise parent to be able to allow his children to be what they want to be. I told him I wanted to partner with you because I think that you have a lot of wisdom. And for me, that’s a great value.”

The designer believes it is this wisdom that makes working with the group easy. “They’re silently trying to build an ecosystem for me without interference, because they know that I do the job the best because I know the domain the best. And they let me lead naturally… When I work with them, I don’t have to be mindfully conscious of the fact that they’re a $57-billion empire. They treat me as an equal partner.”

Harminder Sahni, Founder & MD of consulting firm Wazir Advisors, says that the only way forward for brands like Sabyasachi is to either sell to a corporate or to corporatise. “For growth, you need the backing of a corporate house. Especially if you want to go global as it’s an expensive foray and it is uncharted territory.” As far as expansion into various categories is concerned, Sahni says there is no playbook. While some may expand into larger small-ticket categories to make the brand available to a larger demography, others may stick to their core.

“For any brand to scale globally, it needs to be relevant to consumer audiences that are outside its home market,” says Devangshu Dutta, Chief Executive of consultancy Third Eyesight. For any brand whose products draw heavily from the roots in terms of silhouettes and embellishment techniques, adding products that fit with the ethos and needs of the targeted global markets becomes a must, he adds.

ABFRL and Mukherjee complement each other as the company brings its expertise in understanding consumers at a larger base while the designer is more aware of consumers at the top of the pyramid. “They have a very acute understanding of a consumer that is not mine today but will be mine tomorrow. And I have a very acute understanding of the consumer that they don’t have yet but might get tomorrow.” Mukherjee says he did not take private equity funding earlier because he was not ready. “I’m not here to make money. I’m here to create value. And there’s a huge difference. Value creates money eventually. But money never creates value. With ABFRL, we are very clear about what we want to do.” As for financials, in FY22, Sabyasachi Calcutta (what the company is called post the acquisition) posted a turnover of Rs 229.42 crore, which rose to Rs 343.86 crore in FY23, per ABFRL’s annual report. But profit after tax fell from Rs 27.72 crore in FY22 to Rs 7.96 crore in FY23.

He feels luxury is becoming more abstract and it is about finding value. Moreover, consumers are buying less but better stuff. “People are flirting, but they’re not consuming. It’s like they are channel surfing. What is going to happen is that consumers are going to buy less, but they’re going to buy better. And I’m preparing my brand for that.”

With ABFRL’s backing, the designer is busy strengthening the brand. “We are going to use our core—which is wedding couture—for storytelling, to be able to create different-tiered products at different prices to be able to engage our customers who will slowly and steadily find a ladder to climb up to the core.” However, he plans to make wedding couture very limited and very exclusive. He has already started creating guardrails. Bollywood partnerships have reduced significantly and he is no longer giving his creations for the red carpet. In today’s age of social media, Mukherjee says that everyone believes that they are a celebrity. “For us, our customers are our celebrities. And we are trying to create something that is unique for them. And that’s something that’s not made very visible. But what we are going to make democratically visible are our entry-level products; once we get into beauty that is going to be the most widely distributed. And then it’s going to be accessories.”

Mukherjee says that Indian clothing, which is the heart and soul of the brand, will become more and more exclusive. In clothing, the focus will be on western ready-to-wear. However, that too will be of the best quality. For instance, ready-to-wear starts at Rs 35,000 for a silk shirt with an original artwork, digitally printed. “We are very mindful that we will never dilute the core.” he says.

While currently it is wedding couture that contributes the maximum to revenues, he expects jewellery to surpass that over the next few years. Mukherjee launched his jewellery collection in 2017 and while it was a natural fit, he had an interesting reason for doing so. “When I started looking at people’s selfies, I realised that we occupy the smallest real estate. You see a little bit of the blouse in a wedding picture, you see the garland, the make-up and the jewellery. Where are the clothes? Nowhere. And if the bride decides to wear a bikini blouse, then God save us,” he laughs. “So that’s when I realised that I want more real estate in that picture. And, for me, it was a logical move to start getting into beauty which we’ll eventually get into, and to get into jewellery.”

Accessories is another category he is focussing on as that allows more people to own the brand. Mukherjee is one of the most copied designers in the country. “Today, all top jewellers in the country are copying my jewellery. It happened with my clothes, it’s now happening with my jewellery, so I know we are on the right track,” he says. The same is the case for his accessories. “You go into a copy market and you see LV, Calvin Klein, Gucci and Sabyasachi. I am flattered because that means we have done something right,” he chuckles.

Over the years he has entered into some remarkable collaborations, establishing his brand further. In 2015, he announced his first global one with Christian Louboutin with a collection of limited-edition shoes and handbags, showcasing Sabyasachi’s hallmark embroidery and craft, with Louboutin’s iconic red sole. He also launched the Sabyasachi for Nilaya collection in collaboration with Asian Paints. Other collaborations have included Pottery Barn, H&M, L’Oréal, Strabucks, Thomas Goode, etc. He says he is open to more collaborations but only with brands that are the best in their field and those that allow him to “tell the Indian story without apology”. “I would never do a collaboration, irrespective of how much money was being offered to me, if I was not able to tell the story of who I am and where I come from. I can make more money by selling on my Instagram,” says the designer who went off all social media three years ago to get away from the clutter and the noise. His brand, though, is very active on social media.

(Photo Credit: Business Today)

Mukherjee can be credited with revolutionising luxury retail in the country. Walk into any Sabyasachi store and you are transported to a world of opulence and luxury rarely seen anywhere else. For instance, at the Mumbai store, over 100 chandeliers, 275 carpets, 3,000 books, and 150 works of art created by the Sabyasachi Art Foundation—which he runs to promote art—are layered among antique Tanjore paintings, vintage photography, rare lithographs, and historical trinkets, some from his own collection.

“When I saw the Ralph Lauren flagship store for the first time, it made me realise how important the soft power of a retail store is to be able to influence a customer because it’s an immersive journey, which tells the length and the breadth of the brand’s story,” says Mukherjee, adding that today it is not just about the product but also the experience of selling the product.

With the opening of the Mumbai flagship store, the total number of Sabyasachi stores in India stands at four, the others being in Kolkata and Delhi, and a jewellery store in Hyderabad. In addition, there is the New York store and an exclusive Sabyasachi Jewellery boutique in Dubai.

Will he look at more expansion? Not immediately, he says. “We are going to build our flagship stores one geography at a time. I first want to expand brand literacy by building our flagship so that the story of what the brand is all about and who we are does not get diluted. We will take our time to understand the geography and then expand later,” he says. However, a part of the business is going to be opened to wholesale again. “Which means that in a couple of years, we are going to start speaking to departmental stores such as Selfridges, Browns, etc.,” These are stores where Mukherjee used to retail at the beginning of his career in 2004-05.

“Right now, I’m charting my own growth, one brick at a time, so that I last those 100 years,” he signs off.

(Published in Business Today)