ITC plans to take its flagship Wills Lifestyle stores upmarket, transforming it into a luxury brand to profit from the upgrading Indian buyer who is willing to pay more.
In a move analysts consider risky, Wills Lifestyle will revamp its product portfolio with more of designer wear and international designs and explore newer retail formats like boutique stores and specialised luxury stores to reach out to luxury buyers.
This will increase the average price of products at Wills Lifestyle to around Rs 3,000 from Rs 2,500 now.
“The premium consumers are upgrading themselves to the luxury segment… A transition to the luxury segment will make our business model future-proof for the next ten years,” says ITC’s Divisional Chief Executive (Lifestyle Retail) Atul Chand.
The tobacco-to-hotel conglomerate wants to carve out a niche presence in the increasingly crowded apparel retailing business where margins are becoming a strain due to competition and increase in commodity prices.
Wills Lifestyle has been facing competition from the flurry of international brands entering India like Zara, Promod, Diesel , Tommy Hilfiger and Mango, which are also scaling up their presence.
Analysts, however, say it will be an uphill task for an Indian apparel brand to position itself in the luxury segment.
“Whichever Indian brand had tried to raise prices has met with a significant challenge in growth, more so in the apparel, accessories and footwear space,” he adds, citing the failure of Titan’s luxury wristwatch and Raymond’s Manzoni range.
Wills Lifestyle soon plans to launch products on cashmere wool, including Pashmina jackets priced upwards of Rs 25,000, ties at Rs 4,000, and a line of international design women wear on premium silk and chiffon starting at around Rs 6,000.
Last October, ITC rolled out the Wills Luxuria menswear range at Rs 4,000-5,000. It is also launching an international collection of formal women wear crafted by a Milan-based design house Figoli.
ITC plans to ramp up its collection of such luxury products by more than 25 per cent as it expands its retail network to 100 Wills Lifestyle stores from 75 in 15 months.
The trigger for the luxury drive is the Wills Signature range, launched some five years ago to leverage its title sponsorship of the fashion event, India Fashion Week.
Wills Lifestyle has partnerships with a host of designers like Tarun Tahiliani, Rohit Bal, Rohit Gandhi, Rahul Khanna, Satya Paul and Ranna Gill, with plans to soon roll out a new line by Sabyasachi Mukherjee. Such designer wear contributes 15 per cent to the store’s over-all sales.
“The designer wear enabled us to successfully attract more high-end upscale consumers into the franchise and gave us the confidence to foray into luxury retailing,” says Chand.
ITC also plans to open specialised luxury apparel stores in upmarket malls and boutique stores inside its own chain of hotels.
It recently launched the first menswear luxury store in Chennai and three boutique stores in ITC hotels at Bangalore, New Delhi and Agra.
“The luxury and boutique stores will sell products priced upwards of Rs 4,000-5,000. We are also looking at starting just women wear luxury stores and plan to take the boutique stores beyond the ITC hotels,” says Chand.
He said all ITC stores are in a break-even stage and the lifestyle retail division is close to profitability. The division is targeting a 35 per cent growth in revenues this year compared to 20 per cent last year.
Source : Economic Times