Indian retailers expand ahead of global brands entry

03 Feb '12

4 min read

Realizing the tough competition they might have to face once single format global brands enter the Indian market, apparel retailers in India have adopted a strategy to expand and add more stores.

Apparel retailers like Creative Lifestyles and Kimaya Fashions are adopting this strategy, in spite of the current slackening of economy. Most retailers witnessed a drop in their sales post Diwali and either advanced or extended the end-of-season discount sales period.

Creative Lifestyles, which owns the brand 109F, is opening exclusive brand outlets (EBOs) and has launched an Indo-western apparel brand 'Fusion Beats'.

Mr. Radhesh Kagzi, CEO of Creative Lifestyles, told fibre2fashion, “The current picture seems gloomy, but we believe that to fight the scenario, we have to do something and we cannot just sit back at home. We need to take measures which are unconventional.”

Briefing about expansion plans of his company, he says, “We are expanding with EBOs and we are in advanced discussions with few of them. We are adding more stores in large as well as multi-brand formats to expand our reach pan India.”

“We have recently launched an Indo-western apparel brand 'Fusion Beats' for which we have got tremendous response from our MBO partners. We also got good response at the 54th National Garment Fair held last month.”

Another apparel retailer on expansion spree is Kimaya Fashions that plans to take advantage of the current scenario to prepare and get ready to take advantage of the future scope.

Explaining the rationale for undertaking expansion in the midst of slackening demand and fears of slowdown in Indian economy, Mr. Pradeep Hirani, Managing Director - Kimaya Fashions P. Ltd, says, “Kimaya is a long term player and like the last slowdown, the current economic slowdown is not expected to last more than 2 years. All our preparations are for the long term, since we have no doubts that India will be on the top in the long-term. So contrary to the current scenario, we are going ahead with full gusto with our expansion plans.”

“We are planning to launch around 60 new stores in the country. We are also coming up with a lot of product extensions,” he reveals.

Analysts too agree that the problem faced by the Indian retail sector may not last long and demand would be back soon. They foresee an increase in competition once global brands enter the Indian market following the Government's decision to allow 100 percent foreign direct investment (FDI) in India's single brand retail sector.

They argue that expanding at present would create enough brand recall before the global brands enter the country.

Elucidating on benefits of opening more outlets in the current scenario, Mr. Anand Ramanathan, Associate Director - KPMG India, says, “The expansion by brands like Kimaya right now makes complete sense because in the Indian market the demand story is still intact. And, one would want to gain as much share as they can, and promote the brand as much as possible, before the market gets even more cluttered with foreign competition. Now that FDI is announced in single brands, there are a lot of luxury players entering the market.”

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