The Hindu Business Line : Royal Classic shifts focus to domestic market

Chennai, Jan. 3 Shrinking margins as a result of the strengthening rupee has made the Tirupur-based garment company Royal Classic Group to focus more on the domestic market.

Recently, the Rs 225-crore company launched an ‘auto-fit’ trouser brand ‘0 Press’. According to Mr R. Sivaram, Executive Director, Royal Classic Group, the company also plans to foray into the denim segment, which will be followed by womenswear and kidswear.

“Though we earn over Rs 150 crore from our export business and only Rs 75 crore from the domestic market, we now want to focus more on the domestic market as our export business is now almost on zero-margin basis,” he said.

Set up in 1991, Royal Classic Group was focussing only on the export market till 2000.

It launched its first brand, Classic Polo, in 2001 with T-shirts. In the following years it launched brands such as Swiss Club (premium range of formal shirts) and Smash (undergarments).

Now the brand Classic Polo has T-shirts, shirts, trousers, jackets, sweaters and cargos under its belt.

Earnings

It currently exports its products to the US and European markets.

“Almost 70 per cent of our export earnings come from the US and the rest from Europe,” says Mr Sivaram. Now, the domestic market augurs well for the company as it has been growing at over 55 per cent in the last five years.

Though the company targeted a Rs 340-crore turnover for the current fiscal, he said it might not be possible in the current rupee-dollar situation and hence it would close the year with around Rs 275 crore, “which is practical”. According to him, the difference would come from the domestic business.

He said the company expects Rs 60 crore from the brand Classic Polo (its flagship brand) and Rs 15 crore from 0-Press and Rs 10 crore from the other brands.

It also plans to expand its retail network with more exclusive brand outlets (EBOs). Royal Classic at present has 52 EBOs across the country. “We plan to have at least 100 EBOs by the end of the current financial year,” said Mr Sivaram.

Apart from this, the brands are retailed through 3,000 multi-brand outlets, including Shoppers’ Stop, Pantaloon and Globus.

It has also launched a customer loyalty programme to acknowledge the brand regulars.

Elaborating on the company’s latest trouser brand ‘0-Press’, Mr Sivaram said the trousers, priced in the Rs 1,000-2,000 band, are manufactured at its new facility at Waagrai near Tirupur.

The Rs 4-crore facility can produce 3,200 pants a day. The pant’s adjustable waistband, which is designed to fit every body, is the USP of the product.

“Moreover, it doesn’t require ironing for at least 100 washes as the material has been treated to be wrinkle-free,” he explained.

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