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Investors bet big on the fashion retail industry


India is a country embracing fashion at its best. An increasing number of the people want to be a part of this in vogue segment of retail. However, fashion retail is a constantly evolving and subjective concept, and not easy to define. Brand is a powerful tool to attract more consumers to buy certain products.

Fashion, an excellent investment opportunity
The retailers looking out for investors should pay attention to the colour of the money, the bag in which the money is coming in and who is carrying that bag

Luxury fashion is a billion-dollar industry employing millions of people around the world. Ever since the economy became more global, consumers have to a large extent been affected by this fast evolving industry. The industry has grown eight times in the past 15-16 years. Now, it is in a better position and a better eco-system as compare to 10 years ago as more and more investors are showing a keen interest to bet a big on this industry.

Highlighting the future of the fashion industry CEO, Tommy Hilfiger India, Shailesh Chaturvedi says, “There is immense opportunity in this sector. If I look at every metrics whether, readymade to tailored business, branded to non-branded, organised to unorganised, there is a lot of scope. However, it takes times to covert dreams into reality. But what matters the most is how do we execute this opportunity is the bigger issue.”

Key points that investors should keep in mind before investing their hard-earned money is that instead of brands and products, the investors should look out for people who are committed and enjoy being in the fashion industry. They should have the confidence in their product and their design and another most important aspect is competence.

Whereas, the retailers looking out for investors should pay attention to the colour of the money, the bag (read: terms and conditions) in which the money is coming in and who is carrying that bag.

Managing Director and Partner, Sequoia Capital, VT Bharadwaj says, “Enthusiasm around the space compelled us to enter this industry.” He further added, “I don’t think the challenge in this sector has been about opportunity or market size which is a very rare issue in many product categories, so therefore one should not be dismissive of that but that is very good. The real challenge in this sector has been how do you execute. So that you can build a high quality business that can scale independently for many years.”

Apart from active investors, the sector has also witness hesitant investors like Everstone Capital Advisors who are known for investing majorly in food sector. Around 10 years ago, they invested in Anita Dongre (AND) and BIBA and after a gap of many years decided to invest in Ritu Kumar.

Managing Director, Everstone Capital Advisors, Deep Mishra says, “We were the early investors in BIBA and AND. After that there was a long break. Then we looked at it from a top down approach. We did a little bit of macro research to find out which is the one sector that has not had a bad year in the past 20 years and it was actually luxury. So except for 2008, luxury never had a bad year. And then we narrowed down the sizeable players in that segment and this is how we opted for Ritu Kumar.”

Driven by increasing disposable income and aspirations, Indian consumer spending is expected to grow. There is a growing appetite for affordable fashion among the youth generation which is helping it to grow further.