Textile business conglomerate Arvind Limited has announced an aggressive expansion strategy to strengthen its B2C retail business in the domestic market. Having witnessed a whopping 70 per cent year-on-year growth in its fabric retail business in the last two fiscals, the company plans to double its fabric retail revenue to reach the Rs 800-crore mark by FY 2013-14. “The fabric retail market in India constitutes almost 65 per cent of the total domestic apparel market, of which almost 80-90 per cent is traditional. In the last few years, the modern fabric retail market has witnessed a steady growth. We plan to address the ongoing demand for branded fabric,” says Kulin Lalbhai, chief manager – retail, Arvind Limited.
To scale up the revenue, the company has planned a three-pronged strategy focussed on product innovation and retail network. While the company is adding a wider variety of merchandise to its existing portfolio, it is also taking up a unique attempt to increase the sale of its cutpieces, instead of fabric rolls, to penetrate into tier III and tier IV towns. “We are reducing the SKU to target smaller markets,” adds Lalbhai. To cater to a wider target audience in tier II, III and IV markets, the cutpieces will be priced at Rs.399 onwards.
As part of its aggressive expansion strategy, the company has also planned to roll out its exclusive stores offering shirting, suiting and the denim fabric range, as well as its inhouse brands such as Flying Machine, US Polo and Arrow.
Initially, the company will launch two formats – 1,500 sq.ft and 2,500 sq.ft – depending on the location, market size and demographic profiles of the target customer.
The company plans to pump in almost Rs.100 crore for the expansion of its overall group business with 60 per cent of the investment dedicated to the retail business. Arvind Limited is expected to register a turnover of Rs.400 crore from its fabric retail business in the current fiscal.
– Piasi Sinha