In a major development to country’s luxury apparel retailing, India has found a new player in the form of Vee India Retail which opened its maiden store branded Pocket Store at Pitampura in Delhi on 14th of this month. The store retails over 60 international apparel brands including CK, Hugo Boss, Lee, Lacoste, Levi’s, Puma, Reebok and Adidas. Further, the company also plans to open another three stores by February-end and carry the number to 14 by March 2009 and 60 by the end of 2009. In an exclusive interview with IndiaRetailing, OP Gupta, CEO, Vee India Retail shared his views that inspired him to join retail and his targets over the next few years. Excerpts:
IndiaRetailing (IR): At a time when retailers in India have kept expansion on hold, you have entered in to luxury retail segment. What prompted you to take the move?
OP Gupta (OPG): Since real estate prices have gone down by 25-30 per cent during this period and by April-end it is expected that there will be another 8-10 per cent decrease in the same, I found it a right time to foray because we are getting properties at excellent prices at our own term and these properties will be with us for 9-14 years. If the recession continues for a period of one year, we may not be having a good business during the period. But the properties that we are getting will be beneficial for us in coming 8-10 years, and this is indirectly helping us to multiply immediately.
IR: Do you mean recession is helping your business?
OPG: Definitely. Recession has helped us and will be helping over the next 8-10 years. Since the recession period started, more than 60 per cent property prices have gone down. The property which we are getting now at around Rs 75 was earlier costing at around Rs 275. This is one of the major reasons for our aggressive expansion plans. Even our franchisees are also very aggressive because the properties and deal they are getting now was three times higher a few months ago.
IR: To what extent the company has been leveraging the opportunity?
OPG: We are very prompt to utilise the deal we are getting. It is a surprise to me as for properties in commercial estates in Bengaluru which was targeted at around Rs 800 thousands is now available at Rs 250 thousands. We have finalised around 35 franchisees and are expecting around 60 stores to be operational by the end of this year.
IR: How many formats will the company operate?
OPG: The stores will be opened in two different formats — Pocket (1,500 square feet-5,000 square feet) and Pocket Junior (1,000 square feet-3,000 square feet). While Pocket normal will retail over 60 international luxury apparel brands for men and women, Pocket Junior will be selling11 luxury brands for kids.
IR: What are the brands on offer?
OPG: We are targeting popular brands rather than selling those about which the customers do not know much. We are trying to add those brands in our portfolio for which around Rs 50 million investment is made for marketing in India by the company itself. Currently, our portfolio comprises brands including CK, Hugo Boss, Lee, Lacoste, Levi’s, Puma, Reebok and Adidas in the Pocket range whereas Benetton Kid, Levi’s, Nike Kid, WWE, Spiderman, Disney and Berbie are part of Pocket Junior merchandise. Further, we are also in talks with Gap Kid and hope by end of March, the deal will get materialised.
IR: What is the proposed investment plan of the company?
OPG: We are investing around Rs 4,000 per square feet retail space and our store size spans across 1,500 to 5,000 square feet.
IR: What are the franchise criteria?
OPG: We are only partnering with pure retailers who have been in the business at least for a period of 3-4 years. We are supporting them with the merchandise while the store and furniture will be arranged by the franchisees themselves. We will be operating around 10 per cent of the proposed 60 stores to be operational by 2009-end.
IR: Who are your target consumers?
OPG: Besides metros, we are planning to open stores in tier II and III cities.
IR: Which particular region can attract maximum benefit for your brand?
OPG: East is definitely most potential and less affected market right now. We are also opening stores in Jammu & Kashmir, besides metros and major cities in India.
IR: What kind of promotional activities the company has adopted so far?
OPG: We are moving through live events and also advertising across media. Apart from direct sells and promotion supports, we already have PR agencies and people in sales who are working in the back end. We are very much aggressive and are putting our 100 per cent effort for the expansion.