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‘We hope the share of speciality retail in our revenues will rise to 25 per cent’

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Spencer’s Retail Ltd, the retail arm of RPG Group, is betting big on the speciality retail format. The company has added apparel brands such as Beverly Hills Polo Club (BHPC), Ladybird and Marc Ecko to its portfolio. In an exclusive interaction with IndiaRetailing, K Dasaratharaman, president, speciality retail business, Spencer’s Retail Ltd, talks about the company’s expansion plans and more.

How do you plan to expand the Marc Ecko brand in India?
We are focussing on getting the merchandise and pricing right and mapping the mind of our target customers; we can move to the next level only after everything falls in place. Our focus markets as of now are Delhi-NCR, Mumbai and parts of Punjab.

So, the brand will take the EBO route?
Initially, Marc Ecko will be launched through EBOs, but later we will accommodate it in MBOs also; we are also open to the concept of shop-in-shops. Actually, brands such as Marc Ecko are quite flexible and can do well in both EBOs and MBOs.
We plan to roll out 4-6 EBOs by the end of this fiscal, but we have to be very cautious while choosing MBOs because it is a brand that is between mid-segment and premium.
Who is Marc Ecko’s target audience?
Marc Ecko will be targeting people in the 14-24 age group who are fashion-conscious and ready to shell out money.
How much will you invest on Marc Ecko?
This fiscal, we will be investing Rs.5 crore on the expansion of Marc Ecko.
Spencer’s is focussing on expanding its speciality retail business. What is the ROI in apparel retail?
It’s too early to talk about ROI. Spencer’s speciality retail has three segments – apparel, which consists of BHPC, Marc Ecko and soon to be launched Ladybird, music retail, which has Music World, and F&B, which has café chain Au Bon Pain. All these businesses are doing good at the store level, but calculating their ROI will still take some time.
What kind of rental tie-up do you have with malls for your apparel brands?
We are working on the minimum guarantee and revenue-sharing models with malls. According to me, revenue-sharing is the most feasible model for both the retailer and the mall developer. It gives the retailer a breather to build his business easily, while the mall developer can benefit from the growth of the business.
What kind of tie-up do you have with Ecko International?
We have a licensing deal with Marc Ecko. We have a similar deal with BHPC.
After opening EBOs of BHPC and Ecko, do you plan to launch Ladybird EBOs in the capital?
In a couple of months, we will be launching Ladybird in the capital. We are looking forward to launch it really soon.
How many BHPC EBOs will you launch this fiscal? Out of the total EBOs, how many will be franchised?
By the end of this fiscal, we plan to have 30 BHPC stores – 20 company owned and 10 franchised. We will also be launching our first BHPC franchising store soon.
Franchising is a very viable route in apparel retail; we are open to this route in both tier I and II cities. In fact, we will be providing marketing support, HR training and guidance in the context of store design, merchandise assortment and visual merchandising, among other things, to the franchisees.
Will the investment made on fashion brands be internal?
Yes, everything is equity funded in Spencer’s Retail.
How much does the speciality apparel business contribute to Spencer’s overall revenue pie?
Speciality retail currently contributes around eight per cent to our overall turnover. In revenue terms, it is approximately Rs.100 crore. We hope the contribution will increase to 25 per cent in the next four years.

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