Feathers in the Cap

From Rs 5 lakh to Rs 90 crore and now targeting the 500 crore mark - the Brothers Kapoor have come a long way in less than two decades. A profile by Ranjan Kaplish.

After Jalandhar, it was Ludhiana. Seeing success in all these cities, Kapsons kept going and also tried to sell fashion in the manufacturing hub itself. “Retailing in Ludhiana was difficult to start with as customers there do not have much of brand awareness and were used to the unorganised retailing and discount shopping. But within two years we have seen a good response from the visitors and sales are picking up well”. Kapsons Ludhiana in 3,000 sq ft witnesses around 400 footfalls daily. The customers in this city are very particular while shopping and would not buy anything that they can make out is produced locally. For instance, corduroys and tweeds are local products and so the store keeps a limited stock of the same.

Ludhiana has witnessed the change in the entire retail scenario. The city already has 11 malls while 22 more are expected to come up. An IMAGES & Confederation of Indian Industry Study depicts that over the years, the retail spending potential of Ludhiana is going to increase from Rs 3,864 crore in 2005 to Rs 5,940 crore by 2010, registering an increase by Rs 2,076 crore in the coming five years. In addition, the retail floor area demand is expected to rise by an additional 3.1 million square feet by 2010. Kapsons has miles to go in this city.

The group has big expansion plans in retailing. Looking at the potential of category stores, the company plans to open branded retail stores in the region for which it has already booked spaces in many upcoming malls and other shopping centres.

Visual merchandising
“Identifying the need of visual merchandising in today's retailing environment, a simple white box can no longer define excitement. It may be as simple as adding one bright colour to a wall or adding colour through product, but colour definition will always present excitement. Customers want to know that retailers have a clear point of view, that they honestly present their products and services and always give the best for what is spent. Often, these values are presented best through visuals”, says Kapoor. With due focus on visual merchandising, every Kapsons store adds bright colours and has theme-based window displays. The displays are always in tandem with the latest offerings and the festive seasons.

Customer loyalty

The Kapsons' customer falls in the Rs 20,000 per month income group. The population of Chandigarh is about 10 lakh while surrounding towns like Panchkula with three lakh people and Mohali which has a population of five lakh. In Amritsar and Ludhiana around 20 per cent and 30 per cent people fall in the same category. Ludhiana has over 40 per cent of the same income group and Kapsons is trying to tap on the same and has already made a loyal customer base in these towns.

Kapsons maintains a customer database with well defined profiles of those who have enrolled themselves in its loyalty programme called Royale Club. The club was started in 1999 and till date it has a membership of 3000 loyal customers from Chandigarh , Jalandhar, Amritsar and nearby areas.

The Royale Club offers an annual membership card to the customer that entitles them to various discounts and schemes at every Kapsons outlets. Apart from this, the cardholder gets a cake delivered at his/her place and also a 7.5 per cent discount on birthdays and anniversarys. The end-of-season sale invitations are also sent to the cardholders. The kids in the Royale Club fall in the Kapkids Brigade which indulges the kids in various activities to enhance their personality. The kids get to participate in various competitions and workshops arranged to help them shape up their hobbies. To have a regular interface with the club members, Kapsons publishes Kaleidoscope a quarterly fashion magazine. The magazine celebrated its first anniversary in October 2006.

The company spends only two per cent of its annual turnover for its promotions and also has a website in the making for direct customer interface. Plans to sell too are on the cards.

Back end: supply chain

The distribution network of Kapsons is being handled by its subsidy Kapsons Agencies. The agency manages the supply chain and deals with various suppliers and manufacturers. The agency also distributes leading brands to the various dealers of Chandigarh , Punjab , Haryana, Himachal Pradesh and Jammu & Kashmir. The list of brands under its distribution include Pepe, Freelook, Weekender, Tycoon, Tabachi, Shapes, Arrow, Puma, Toonworld, and many more. This entire network is controlled from a 12,000 sq ft office in Chandigarh . The hoard of all brands is stocked in a 4,500 sq ft godown here and is fed from here to the local as well as outstation outlets of Kapsons.

Commenting on the opportunities of fashion retailing in Punjab, Kapoor said, “I believe Punjab will be the biggest retail destination. The state by far would see all leading brands, be it domestic or international as also the chain stores, hypermarkets, super stores operating from here. The state has economic strength which will give a boost to organised retailing. The last three years has seen fashion brands growing at 40 per cent. This pace is expected to go up in the next five years. This huge potential needs to be tapped in Punjab."