Women’s ethnic wear tailors growth 

Neha Tyagi & Sagar Malviya, The Economic Times 

Mumbai, 3 January 2017

Leading Indian womenswear brands bucked the slowdown trend on the back of mostly younger consumers shifting from tailor-made to ready-to-wear stylish designs at affordable rates and discounts. Makers of ethnic brands in the country — TCNS Clothing (maker of W and Aurelia brands), BIBA, House of Anita Dongre (AND and Global Desi brands), and Ritu Kumar — all posted 14 per cent-64 per cent year-on-year jump in their revenues last fiscal, even as the overall Indian apparel market slipped to single-digit growth at 8 per cent.

Sales of these four companies put together equals that of the apparel sections retail chains Shoppers StopBSE -0.51 % and Lifestyle International that sell around a hundred brands, and are more than Tata’s Westside. In fact, with combined sales of Rs 1,600 crore in the year to March 2016 as per their annual filings, these companies have nearly doubled their business in the past two years.

“Consumers no longer are stuck to the idea of compartmentalising ethnic wear and western wear as strictly as we think it is. There is a growing market for contemporary Indian wear, which cuts across all product segments,” said Anant Daga, CEO at TCNS Clothing.

The maker of W and Aurelia brands, which posted a 65 per cent growth in sales for FY16 at Rs 591 crore, is expecting a threefold jump in revenues in five years.

Experts say there’s good growth opportunity as branded women’s apparel is an extremely under-penetrated category and that is changing gradually.

“The number of women taking up ready to wear earlier was smaller, which is now picking up. Also, younger women are preferring to go out wearing something which addresses both traditional aesthetic and the work environment,” said Devangshu Dutta, chief executive at retail consultancy Third Eyesight.

This growth potential has helped TCNS Clothing, BIBA, House of Anita Dongre and Ritu Kumar — which are nearly two decades old or more — attract private equity investments in the past three years. While Everstone Capital picked a minority stake in Ritu Kumar for Rs 100 crore ($16.6 million), Warburg Pincus and Faering Capital invested about Rs 300 crore to buy a stake in BIBA Apparels. General Atlantic has picked up a significant minority stake in AND Designs for around Rs 150 crore. More recently, US-based private equity firm TA Associates invested about Rs 937 crore in TCNS Clothing.

Experts said companies can now easily support changing trends with investment in product innovation and reach. Indian wear, initially largely restricted to the older age segment, now finds acceptance among younger consumers.

That’s because most companies now sell fusion clothing — a mix of modern and traditional wear — instead of just ethnic, which are reserved for special occasions.

Another growth trigger is growing popularity of online shopping that has helped these brands reach out to customers in smaller cities. Online retailing now accounts for 10-15 per cent of their sales.

While online added to overall sales, companies aren’t necessarily enthused because of discounts. “We have been able to curtail ecommerce growth to a large extent as we believe in selling full price merchandise rather than going into the discount,” said Bijit Nair, president – retail at House of Anita Dongre. “But the new found availability due to geographical presence is helping too,” he said.

Siddharth Bindra, MD at BIBA, said, “We have got bigger stores and more locations. Our product ranges have evolved. We also brought larger heavier collections and collaborations with designers which did very well.” BIBA posted sales growth of 15 per cent at Rs 441crore in FY16.  

(Published in The Economic Times)