The Hindu Business Line : Sale extended!

Aspirational middle-class buyers have traditionally depended on those end-of-season sales at a Pantaloons or a Westside to buy their annual quota of clothes, which are supposed to see them through till the next sale. Now, they need not wait a whole year to replenish their wardrobes. A few retailers, leveraging the demand for branded clothing and accessories, are offering these products at discounted rates throughout the year.

Based on the success stories of discount stores such as Ross and TJMaxx abroad, Indian retailers such as The Loot, Provogue and Prateek Apparels are offering a Spykar, a Levis and a Reebok at throwaway prices round the year. The discount stores are targeting singles or young families currently shopping at the malls. “Our competitors are the likes of Pantaloons, Globus and Shoppers’ Stop,” says Jay Gupta, Managing Director, The Loot, the Mumbai-based Rs 25-crore discount store chain.

Affordability, the USP

The discount stores’ USP lies in the fact that it offers the same shopping experience as an air-conditioned mall, but at an affordable price. A discount store offers a wide range of options in brands and it works because of low brand loyalty. “In demographic terms, we are talking of section A & B, 24 to 35 years of age. They are modern and brand-conscious. They are also price-conscious and want the best of both worlds – brands and price. Hence, the discount store concept, like ours, appeals to them,” says Pradeep Agarwal, Managing Director, Prateek Apparels.

The company launched its first discount mall, Coupon, in Bangalore this June and are to follow it up with 12 stores by next year in NCR, Mumbai, Chennai, Kolkata and the tier-II cities of Kozhikode, Indore, Jaipur and Pune, among others. The company aims to open 50 such retail stores by 2010.

The Loot, which has been running discount stores for the past three years, operates 23 stores across 10 cities. It aims to add 15 more by the next fiscal and garner a turnover of Rs 60 crore.

The Loot offers discounts of 25 to 60 per cent round the year and Gupta admits that it is a high-turnover business, with very low margins. “We pick up the surplus production of a brand or products that don’t move at particular price points. For example, Reebok may be making great profits in shoes but a particular pair may not be selling at that particular price. So we help them in selling that at a discount,” he said. Many stores of Loot are located in non-prime locations, but Gupta does not see that as a problem. “We are here to increase the brand’s business and the attraction for any customer is the brand itself. We have the strength to pull the customers to us and so can manage with shops in off-locations.”

Factory outlets

The discount store can be compared to a factory outlet in terms of the difficulty in organising sourcing. The clothes are not made to order, come in a wide range of sizes in different categories and, often, extra pieces of the same product are unavailable. In that sense, the customer gets limited options in size, he says.

The Coupon has had a slightly different experience as it uses the synergies of the parent company, Prateek Apparels, and is soon going to launch its own private label. The company stocks 140 brands across categories of apparel, footwear, home décor, jewellery and accessories. “The apparel manufacturer offers end-to-end apparel specialisation – from fashion forecasting to design to sourcing and finally manufacture,” says Ajay Agarwal, Managing Director. While a discount mall would call for an investment of Rs 2 crore to set up, a store could be set up for as low as Rs 80 lakh. The company did a turnover of Rs 200-250 crore last year and hopes to touch Rs 1,500 crore and 50 stores by 2010.

Provogue is another company that is foraying into value retailing with its store Promart at Ahmedabad. It plans to launch three more stores this year. “The Promart concept is conceived as a multi-price department store designed to meet the needs of consumers for the five Cs – competitive prices, change, choice, convenience and customer service,” according to the company. It adds that the Promart store would become a major contributor to revenues going forward. While Promart stores have a large carpet area of 50,000 sq. ft., The Loot stores are as small as 3,000 sq. ft. Each Loot outlet attracts an average of 350 visitors on weekends with a conversion rate of 30 per cent.

The Loot, which is on an expansion drive to set up a 100 stores by 2010, is also simultaneously planning a marketing campaign. The company has signed up Bad Man – Gulshan Grover — as its brand ambassador and plans to roll out advertisements in select media. Provogue, which has Saif Ali Khan on board as its brand ambassador, may use him for Promart as well, but has nothing planned as of yet.

More Stories on : Promotions & Offers | Insight | Readymade Garments | Brands

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
‘Branding can make a difference in B2B markets’

‘Brand change needs consistent communication’

Cricket is back with a bang

Cheeka and Vodafone

Brand new impact

Sale extended!

Emotions, heart of marketing

Digital media grows up

We get what we negotiate

Face it