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Van Heusen eyes tier 2 & 3 markets
Mar '11
Madura Fashion & Lifestyle, India's leading apparel manufacturer is aiming to raise its earnings through deeply penetrating the Rs. 600 billion garment market, and as such would now target smaller towns and extensively promote their premium brand Van Heusen there.

The company intends to launch a minimum of 40 exclusive outlets across the country, every year, majority of which would be located in the tier-2 and tier-3 cities.

Presently, the brand's 120 exclusive outlets, with a majority of them in the metros and mega cities, contribute around 40 percent of its overall sales turnover of Rs. 6.5 billion per annum.

Meanwhile, Madura Fashion, which is a subsidiary of the Aditya Birla Group, is optimistic that the launch of the new outlets would boost the brand's overall turnover to Rs. 8.5 billion per annum.

Some seven to eight cities contribute around 70 percent of the brand's total turnover, as the Group has till now, not paid much attention in exploring tier-2 and 3 markets.

However, the turnover from comparatively small cities like Jaipur, Patna, Lucknow and Trichur has remained to be so astonishing that, it has discarded all doubts regarding their growth potential in comparison with the metros.

The per square foot sales turnover in the tier-2 cities is on a par with that in the metros. Besides, the rentals in these small cities too are at least 50 percent lower than those in the metros. Thus, the retail business in these smaller towns has actually remained to be profitable.

The company by now has invested around Rs 350 million for launch of the new exclusive outlets, and would continue to invest around Rs. 40 to 50 million for launch of the new outlets under a franchise model, every year. In line with the same, the company proposes to launch new brand outlets in small cities like Patna, Jamshedpur, Guwahati, Durgapur and Ranchi in 2012.

Further, intending to upgrade itself into a complete lifestyle brand, Van Heusen, which was introduced in India in 1990, would now even vend non-apparels under its label.

Fibre2fashion News Desk - India

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