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India among top three markets for Lee, Wrangler: Kontoor’s co-COO Waldeck

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Chris Waldeck, co-COO and global president for Lee at Kontoor Brands along with John Gearing, managing director for Asia Pacific on India performance, partner and plans…

Chris Waldeck  (CW), co-COO and global president for Lee at Kontoor Brands and John Gearing (JG), managing director for Asia Pacific, Kontoor Brands have been on a whirlwind week-long tour of Asia – stopping in Seoul, Hong Kong and Bangkok. Waldeck and Gearing were in Bengaluru as part of their last leg of Asia tour and to study India as a market and to take stock of their two-year-old partnership with tech enabler and franchisee operator Ace Turtle. In 2020, Kontoor Brands had appointed Ace Turtle as its India license partner for Lee and Wrangler brands. In a video interview from Bengaluru, Waldeck and Gearing spoke to IndiaRetailing’s Rasul Bailay on Monday.[bs_input_restrict]

Edited excerpts:

It has been two years since you signed Ace Turtle as your India distributor Lee and Wrangler. How has the journey been?

JG: It’s been good. Of course, there have been external challenges…macro challenges with Covid being the big one along with its implications. What the brands have achieved under the custodianship of Ace Turtle has been quite remarkable. We are certainly ahead of where I hope we could be. It’s been extremely good.

When you say extremely good, can you share some numbers?

JG: I really can’t. Particularly at the current moment, at Kontoor Brands, we are in a quiet period ahead of our earnings call. What I can say is that we are very pleased with where we are versus our plans. But I really can’t quantify that, I am sorry.

When Kontoor signed the deal with Ace Turtle, you had mentioned that you are looking more from an omni-channel perspective. How has that panned out?

JG: If I take my Kontoor hat off and speak as someone who has worked in consumer markets for 30 years… people have been talking about omnichannel for the last 10 years and they have been investing in it for the last five. But the Ace Turtle operations are the truest and most effective articulation of omnichannel I have ever seen. I am learning.

Is there any way you can take some of India’s learnings to your other operations?

CW: I think that’s a part of the reason for the trip here. I have the pleasure of being able to see Kontoor’s operations all around the world. I would echo with what John has said. The entire ecosystem that the Ace Turtle team has put together between digital and brick-and-mortar and just how they are connecting with the consumers in a meaningful way for both Lee and Wrangler brands is absolutely magnificent.

One of the big reasons why we chose Ace Turtle was their expertise in the digital field. What’s really great is that the job Nitin (Chhabra, chief executive officer of Ace Turtle) and team are doing is building out a brick-and-mortar structure at the same time. What we are seeing with consumers now, especially as we are coming out of the Covid lockdowns across the world, is the desire to get out and touch and feel products in a shop. Call it ‘retail therapy’ for the lack of a better way of describing it. They are still very much relying on the digital ecosystem for information about the brands and the products. I would say that the job Nitin and the entire Ace Turtle team have done with the brands is leading in terms of an omnichannel experience.

JG: In the old days, stores were stores. They were there to sell products and make a profit. Of course, they are still there for that, we are a business. But stores and now nodes within an ecosystem are there to serve the consumers the best they possibly can. They are also there to reinforce that service to the consumers by gathering data and using that data to enhance the consumer experience, therefore the business.

So, they are not just stores to distribute your product. They are so much more than that now. That’s what Ace Turtle has achieved and that’s what is most remarkable about it.  I haven’t seen that anywhere else in my career to this point. The technology they have enabled is the key.

CW: To answer your question, that would be the one real, significant takeaway is looking at what Ace has done. How they have numbered this together and how we can replicate a similar consumer experience in other markets. Obviously, India is one of the leaders when it comes to technology and that’s not available everywhere yet to the same extent. But as we think about markets in other parts of the world and how we will build them, this is a model that we would look to replicate.

India among top three markets for Lee, Wrangler: Kontoor’s Waldeck
Chris Waldeck EVP Co-COO Global President Lee Kontoor Brands (Left), John Gearing VP & MD APAC Kontoor Brands (Right)

Since Kontoor took over Lee, Wrangler and Rock & Republic, do you follow the model where you appoint the distributors in key markets? Do you also run some of the stores and operations yourself?

CW: We have different models around the world. In China, we have partner stores, but we have a direct model. In Europe, it’s a mix between licensees, distributors and direct as it is throughout North America and Latin America. We tend to look at what is going to be the best way to reach or connect with our consumers in a meaningful way.

Coming back to India, to Ace Turtle, it’s really important for us that we have an India-based company as we think about merchandising and connecting with consumers. Whether it’s the Lee or the Wrangler brand, we want to have the same consumer experience globally, so the brand looks and feels right. The experience, the product and the communication need to be locally relevant. So, we tend to look at our different structures where we can best meet that objective.

What is your assessment of India as a market?

CW: I just got here literally at 2:00 am this morning. So, I haven’t had much time to go out into the market. We will do that later today. Just while talking to Nitin and team and reading, we think this market has enormous potential for our brands. We have the right partner in Ace Turtle. They are fantastic stewards of our brand. It is important. That’s really my job to ensure that the team is there. The overall consumer make-up here, the demographics, the economics of it, we are bullish as a company on India and think there is a tremendous amount of opportunity here.

The deal with Ace Turtle is for 15 years. After that, it extendable by another 15 years. Is that going to happen or wait?

CW: Well, I would never want to predict the future, but all signs right now say that we will have a long and productive partnership together. There is nothing that would say that we don’t feel good about the progress. As John said, they are ahead of schedule in everything they have done. The way they are handling the brands is magnificent.

Have they exceeded targets?

CW: They are ahead of schedule when it comes to the initial targets that were laid out during the first two years.

Are you encouraged to also bring Rock & Republic to India?

CW: I would entertain bringing Rock & Republic to India if that was something we felt was going to work in this marketplace. Something Nitin, John and I have discussed somewhat. We are really focused on the two anchor brands Lee and Wrangler in making sure that we stood those up and in the right way. We will see what the future brings when it comes to Rock & Republic or any other brands.

JG: I read a headline the other day which is not an uncommon headline. It said the current decade is going to be India’s decade. I think that may well be the case. I was in China at the beginning of the China boom in the 90s. While I am not making a direct comparison, there are a lot of similarities in the way things are coming together. I see a lot of similarities in the energy and so like you, I am an unabashed, self-declared India bull.

There are many differences when it comes to China. One important one is the demographic trend, which is favourable in India.

Are you looking at India as a sourcing hub for your global operations?

CW: As a global brand with a global supply chain, we are continually evaluating the different opportunities all around the world. The thing we have learnt over the last 24 months is that you need to be flexible. A flexible supply chain is the best. The other aspect is that as India grows as a market and Ace Turtle also grows in its size and volume, they will have a lot more leverage with their ability to price and source goods. We will look to tag on and leverage in different areas that make sense. Obviously, duties and other things need to be managed all over the world. But at the end of the day, it’s a product proposition that we are after. We will always look for where we can get the best products. How can we bring it to our consumers at the best possible value?

What are your overall takeaways from the Asia trip?

CW: My biggest takeaway is that the marketplace is open. The consumer is healthy, and I am a huge Asia bull. India is one of the leading markets for us, both from the market standpoint and the partner we have. I am very encouraged by it. As Kontoor, we think of our business as categories, channels and regions. Asia-Pacific is one of the most important growth regions for us with India obviously a part of it.

Where would India stand in your list of top 5 markets globally?

CW: That’s a tough question. I would say India would definitely be in our top 5 and likely in our top 3 markets. This is because: One, demographics, people are young; two, how they are looking to expand this market with a smart, omnichannel approach. I continue to be highly impressed with how they are treating brands and how they are bringing the Lee and Wrangler brands to life. I couldn’t be more excited about it.

If India is among the top 3 markets, which are the other two?

CW: China obviously is #1. It has had its struggles with Covid lockdowns and the rest. I don’t think anybody would ever imagine that the market wouldn’t come back strongly. I am a China bull as you would guess. For us, we are underdeveloped in different parts of Europe and there are some white spaces for us as we think of the European market. I have intentionally left the home country out, but we have significant opportunities in the US.[/bs_input_restrict]

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