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Executive Director Max Fashion Retail
For the present as well as future success in retailing one needs to have loyalty programs.
Vasanth Kumar, Executive Director of Max Fashion Retail says that loyalty programs are very important for any brand as there is so much of competition in the market as he converses with Fibre2Fashion Correspondent Manushi Gandhi.
Max, a division of Dubai based retail giant Landmark Group. Max was launched in the UAE in May 2004 and after 10 years it is the value-fashion brand in the Middle East and caters to the mid-market segment. The company has over 226 stores across the Middle East, North Africa and India and continues to expand its chain. With stores that typically measure between 1,800 sq. m to 2,800 sq. m, the company sells its own-label apparel for men, women and children, along with footwear and home accessories.
Vasanth Kumar is the Executive Director of Max Fashion Retail since February 2005. He started his career with a sales & marketing stint in a Consumer Goods company where he handled various marketing campaigns and product launches. Vasanth has an M. Tech from IIT, Madras and a PGDBM (MBA - Marketing & Finance) from XLRI, Jamshedpur.
What has been the growth rate of Max fashion retail over the last few years? What factors have facilitated this growth rate?
Max is 8 years old and over all we are growing at the rate of 38 % CAGR. And for the next 2 years also we expect to maintain close to 40 % CAGR. Firstly, the organised retail sector has grown rapidly in India. In the past 10 years organised retail sector in India doubled i.e. from 15% to 30%.
Secondly, like-for-like sales of our stores have grown at the rate of around 18% per annum. So, when we see 38 % CAGR, 50% of it comes from the newly opened stores and the remaining 50% comes from the already existing stores. As of now, we have our stores in 43 cities and we have recently launched a new store in Jammu and Kannur in Kerala and we are opening soon in Udaipur. On an average, Max is opening one new store every 12 days.
What expertise is required the most in a brand not only to exist, but to stand out in the apparel industry?
I feel the most essential factor to stand out in the industry is product quality combined with experience. This is very rare to find in this industry. If you see our max collection and range, 97% of it is our private label. We adopt our designs from Dubai and we have in house designers for our ethnic collection. In addition to this, our products are sharply priced; they are all typically around 30% below the comparable products of other brands. We source for ourselves; particularly the design sourcing is totally sourced by us. We have 120 vendors who work for us and we directly retail through our own outlets. This way we cut the whole supply chain and directly reach the customers.
As we are sourcing directly we are able to grow faster. We offer cheaper products in a pleasing ambience, customer friendly atmosphere and services. So the combination of good product and experience is what stands out in this industry. This is so much so that today we are not vulnerable to any market fluctuations or any sale happening or any other slow down. We have combined our product quality price and experience in such a manner that customers can come to our stores any time of the year and buy the latest trend at affordable prices. This has been our philosophy and we are able to grow our like-to-like sales by 18% as well as CAGR of 38%.
In your opinion, which are the countries with high consumption of luxury clothing? What are the reasons?
Luxury clothing has high consumption in 2 types of economies. One is the westrn countries where there is high disposable income and people are ready to pay a good price to enjoy luxury goods. This predominantly includes countries like UK, Germany, France and other western countries.
The other type includes emerging economies like China where the productivity has gone up and there is more disposable income. Such countries have an increase in number of millionaires. They have new found wealth and are spending it on luxury goods.
How have been the apparel markets of the India and UAE for the last two years?
Apparel market in India has been quite good for the past one year. We have seen many players doing well in the country. Since August 2013 the market has been growing because last year in April there was a reduction in excise duty. This has helped the apparel retailers to hedge the inflation without putting pressure on the customers’ pockets. In India there has been a rapid growth of malls which is giving more organised retail space. This is helping more retailers to open their outlets and grow their business.
In UAE for the past 2 years the growth has been quite stable. 3 years back there was some truculence because of the market situation. That time the market went down considerably, but it picked up 2 years back and is stable now.
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