A stitch in time

 It’s been a good December quarter of FY 2014 for Indian Terrain and Venky Rajgopal, the garment maker’s Chairman, isn’t complaining. Profits zoomed from ₹33 lakh in the third quarter of FY 2013 to ₹3.34 crore. And the company expects to finish financial year 2014 on an equally robust note. The maker of men’s sportswear expects to close with a topline of ₹220 crore, substantially up from net sales of ₹157 crore in 2012-13. Its share price in the past year has nearly tripled after plunging to around ₹50.  “We see the same strong trend continuing,” says Rajgopal.

Supply chain’s the thing  At a time when a slowdown is haunting most brands, Rajgopal says a few things that Indian Terrain did are paying off. ‘Back to basics’ is a cliché but Rajgopal says this is something it really did. Indian Terrain is a 14-year-old brand and like most brands do, manufacturing was outsourced to a clutch of garment-makers.

    But, reality hit, with missed deadlines, poor quality and so on. “It’s easy to get carried away by the romance of the brand, saying that I will own and manage it and manufacturing will be outsourced. This is a very Western, sophisticated view of brand management. In the US, brands have factories in China as a supply chain by people who have invested millions in state-of-the-art factories for you. But, in India if you do not look at the supply chain, it’s a mistake that you make at the risk of extinction.”

   Two years ago, Indian Terrain began to source its garments from its parent company, Celebrity Fashions. As the 6’3” Rajgopal, a former Indian Police Service officer, explains, “I knew all along that this would be our single biggest advantage. When export was such a large part of our other company we never looked at supporting Indian Terrain as we thought revenues may not be steady. You ship the goods, get the money, but retail is more complex; the wait for cash is longer.”

    To make it attractive for Celebrity, Indian Terrain paid a little more than the export price it got, but had an assured, quality supply chain as the workforce came with the skill sets of an exporter to some top garment brands such as Timberland, North Face and Tommy Hilfiger, Europe.

   Building a robust and reliable supply chain helped the brand charge a premium. At the beginning of the season, it’s critical, Rajgopal points out, for the same garments of different sizes to hit all stores at the same time. “Otherwise you lose footfalls and it’s revenue lost. And, you can compromise yourself with customers,” he adds. 

Digital clicks    The brand, he says, didn’t follow the herd on big budget advertising, but let the styling of its products speak for itself. “It’s easy to get carried away by product design but success in brand sales can be chimerical.” Rajgopal trots out statistics to confirm that what the brand makes is aligned with what customers want. “We crossed ₹200 crore of primary sales (sales to the trade) by March-end. For the year till date, secondary sales of the brand (to customers) was ₹199 crore; that’s true sales. We can be assured that the product is not coming back as returns.”

Indian Terrain spends around 8 per cent of its sales on advertising but the bulk of it goes into in-store activities at chains such as Lifestyle and Shoppers Stop. So, the focus the past year, says Rajgopal, has been on digital. Online sales through myntra, jabong and flipkart were ₹6 crore and this year should see 30 per cent more of online sales. “Our digital guys want more products for online sales but stores are also crying for merchandise. But it needs courage to increase online presence. Unsold stocks in the warehouse can be a nightmare; it speaks of poor brand health,” he emphasises. 

     As Rajgopal explains, it’s been a long and tough journey for Indian Terrain in the past decade-and-a-half that it has been around. It has had to slug it out with much older and established brands but stayed the course and now the attention to quality and detail in its garments is finally paying off. It didn’t have the big bucks for big-bang advertising so now has taken the digital route to promote the brand with its ‘Kill gentle’ campaign — one which the brand says portrays ‘real’ men, and not chocolate-faced boys with clean cuts.

In the December quarter of FY ’14, Indian Terrain doubled its sales compared with the previous FY quarter, although on a smaller base. In calendar 2013, its growth rate has been consistently higher while it has been a mixed bag for other listed garment makers: Kewal Kiran, which produces the Killer denim range, grew between 12 and 31 per cent across quarters while Zodiac’s was less than 30 per cent.

   Indian Terrain’s core clothing is modelled on the concept of American sportswear, which really has nothing to do with sport but a mindset; a distinct style of casual dressing, which Rajgopal says is the signature of all great casual wear brands in the world. “Getting that mix right is what makes us authentic,” he adds. 

More in store Amitabh Suri, COO, says this year will see the brand scale up its retail footprint rapidly. It will add 22 exclusive outlets to the 103 it has all over the country. And it will add 26 more counters to the 167 multi-brand large-format outlets it sells through; altogether the brand sells across nearly 800 doors.

Suri points out that the brand is no longer perceived as a South-centric one as 32 per cent of sales come from the West, with the North and South each yielding 28 per cent of sales. Govind Shrikhande, Managing Director of retailer Shoppers Stop, has seen the growth of the brand since it was launched in year 2000 and stocked on its shelves. “It’s one of those rare Indian brands that has quality at its core and, importantly, a commitment to delivery schedules. It comes from its parent company being an exporter so it knows the importance of deadlines.” Shrikhande points out that Shoppers Stop, sales of sports-inspired casual wear are growing at 15 per cent while Indian Terrain sales are growing at 25 per cent. But, of course, he points out that the brand is still some time away from challenging the big boys such as Louis Philippe or Van Heusen. “They are older brands with a longer legacy and licensed international brands while Indian Terrain is an India-nurtured brand but one developed with passion.”

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