So What’s new at Lacoste India?
Well, this Polo Lounge concept store at Mumbai’s Palladium Mall
is our latest in the country. We have one more in another part of the city at Bandra which is doing well. It was opened around three months ago in tribute to Rene Lacoste who was responsible for designing the very first polo shirt way back in 1927.
Lacoste has been associated with polo shirts for about eight decades now, and these comprise our main product category. The idea behind establishing the Polo Lounge concept was to reinstate our roots by completing the brand cycle where we started off with polos for men and then brought in women’s wear, children’s wear, perfumes, accessories and bags. With the Polo Lounges, the wheel has come full circle for us.
Please tell us more about your Polo lounges. Why did you choose Mumbai for setting these up?
India is a crucial market for Lacoste, and Mumbai is one of the most important cities on our radar. Within Mumbai, Bandra is the only place with a high street of a decent size, so we chose that location to set up our first Polo Lounge store.
The Polo Lounges have to be of a smaller format because of their design. Instead of setting up a new store in the city, we found our existing outlet at Bandra to be ideal for the purpose. It is already popular, and we have a loyal set of customers who keep coming there.
The 500 sq.ft. Polo Lounge at Bandra has a “polo bar” that houses around 40 colours of polos, and a “polo wall” that showcases the available fits – regular, Italian, and stretch. Our customers loved the concept so much that even during the end-of-season sale that we held there, they demanded fresh merchandise in keeping with the store and its ambience!
Any other concept stores in India?
Before Polo Lounge, we opened Live Lacoste in the Select Citywalk
mall in Delhi. This concept caters to the young generation from 18 to 30 years or those who are young at heart. The garments are more fitted and have different silhouettes and styles. They are more fashion contemporary than our regular apparel. Lacoste International has around 50–60 Live Lacoste stores world wide.
We’ve also come up with a concept called Abora, which is the Latin word for a space with small shops. For instance, one of our bigger stores in Kurla, Mumbai, has this concept where small corners have been dedicated to different collections like Live Lacoste, polos, etc.
What are the investments like in each Lacoste store?
We have a standardised format. Whatever we spend in India is comparable to any other Lacoste store across the world. The idea is to give customers the exact impression, experience and furniture as they get anywhere else. Every bit of our store decor in India comes from the Lacoste worldwide design team. We spend around the same amount even if we go by the exchange rate. In India, the landed cost is high as is the custom duty, which makes it more expensive. I can tell you, however, that the Polo Lounge is 100 percent more expensive to make than a standard Lacoste store.
The single-most killing factor for any retailer in India is rent. Again, we try and maintain our rents along the lines of any other Lacoste store across the world. Only our product pricing differs. While our positioning is the same worldwide – affordable luxury – our regular polo shirt costs $50 in India, Euro 90 in Paris, $100 in the US, and $120 in China. But the manufacturing costs remain almost similar.
Once you invest in a store, what is your expected RoI period?
Earlier, we would give our stores around one month to break even. Now, we have started giving them three months. This is because we are targeting new catchments and are mainly looking at the mall format. Sometimes, the mall where we are located takes time to pick up. Otherwise on the high street, we expect our store to become profitable within the first month.
We have been targeting malls in the last three to four years. Currently, 80 percent of our stores are located in malls and will continue to do so going forward. However, there are a few high streets we won’t give up on such as Linking Road in Mumbai, Connaught Place in Delhi, MG Road in Bangalore, and MI Road in Jaipur because these still carry a lot of value. The reason we choose malls is simple. On any weekend, average spending families looking for a break prefer an air-conditioned environment where they can get food, shopping and entertainment, all under one roof. And that’s where we come in.
How big is an average Lacoste store?
The average size of a Lacoste store in India is 1,500 sq.ft., up from 700 to 800 sq.ft. earlier. Some years ago, as the footfalls increased, we closed all 50 or so Lacoste stores in India and opened bigger ones. For example, we shuttered our 700 sq.ft. store in South Extension in Delhi and opened a new one of 4,000 sq.ft. right above it. It is now our flagship store in the city. Currently, our stores get about 300,000 customers a year combined.
How do you see the competition?
Our closest competitor is Polo Ralph Lauren
but they are not yet present in India except in The Collective stores. Then we have Armani Exchange which is a competitor in denim wear.
We actually welcome competition because the larger the number of brands entering the country, the higher is the brand loyalty and consciousness. We are not afraid of competition at all – in fact we love it and welcome it.
What have been your key learnings while at Lacoste?
We have to maintain consistency, innovation and quality. Many companies have not made it here simply because they’ve compromised on these factors. Relaxed elegance, comfort, quality and innovation are the four pillars on which we rest.
Any plans for e-retailing?
Lacoste does not intend to get into e-retailing except for perfumes (which we are already selling online). I feel e-retailing would dilute our brand since most e-commerce is currently based on the discount format. By not engaging in e-retailing, we get to know which sites are selling counterfeit Lacoste apparel. E-retailing is not in keeping with our worldwide outlook since e-commerce laws differ from country to country.
What are your future plans?
We currently have around 40 stores in India in a combination of EBOs, flagship stores and shop-in-shops. We plan to grow to 61 stores by 2014.
Finance-wise, in the year 2011, our plan was to double our costs and triple our sales, and we are pretty much on target. Our sales grew by 33 percent last year. This year, we are expecting to touch 35–40 percent in growth.
Our expansion on the cost front is pretty much on target too. By 2014, we will triple our sales from the 2011 level and double our costs. We are also working on a long-term loyalty programme for our customers.