That’s good. These days, a range of foreign brands are seen invading, and even local contenders in your line are spreading across India. How soon is the move likely to saturate the market? Are such happenings to bring in the quest of survival in the sector?
Yes definitely there will be ‘survival of the fittest’ situation at some point in future. But an upcoming market offers better opportunities than steady or saturated market.
In the organized ethnic wear, there is ample of space and opportunities for us to explore and learn at present. Once that space becomes crowded, the key to success would be your products. For that, we are primarily concentrating on production & design.
Over the last 3 years, brands like Chhabra 555, Ashika have stepped up their resources on franchise marketing and are going great at it on a national scale. We already have an experience of running VIVIDHA retail showrooms, however, we feel the need to strengthen our production facilities even more and go only at the best opportunities available which would bring a sure shot win-win for us as well as franchisees.
To talk of the segment we are into, the Indian wedding industry is evergreen and will continue to bloom forever. Sarees and Lehengas form an integral part of the wedding scene. The Saree, as a category, clocked an impressive 8.8% annual growth in value terms between 1998 and 2006 to become a Rs 53,459-crore market in 2006, according to an ICRA report quoting statistics from the ministry of textiles. The humble Saree today accounts for more than one third of total consumption of apparel and household textiles in India (Economic Times, 2008). The Lehenga is premium bridal wear apparel having a never ending, vast potential across the country and the product also has a tremendous scope for specialization and innovation.
In organized retail too, ethnic wear retail beats big western retail brands in terms of Customer Footfalls and Sales Density (Sales per Square Foot per Month). Average Sales Density of organized ethnic wear stores is nearly twice that in western wear counterparts.
Once with proven resources and potential, we aim to be spread steadily across the length and breadth of the country over the next few years. We are open for franchise tie-ins and invite potential investors to join hands with us to become a leading force in the largely untapped segment.
To tap this segment, Visagar Group being also in the Financial-Corporate advisory business, considering present milieu, believes what to be wiser- a backward integration or a forward one?
With backward integration, we are preparing our business for the future. Organized retail of ethnic wear is still immature and we intend to go slow and steady for now in the retail business. Having said that, we are constantly updating ourselves with the dynamics of product mix, locations, etc which are quickly evolving.
To conclude the talk here as the last question in connection to your recent embroidery unit set up plan, can we request the rationale?
To benefit from the synergies between various business divisions dealing with the product and other related products. In general terms additional margins of upto 15% to 20% on the final sale price would be possible in our wholesale channel. With the unit, we plan to specialize in Lehenga – the evergreen wedding attire. Production of Lehengas was primarily by hand work. Though machine based manufacturing of Lehengas is relatively new, we have found ways of achieving innovation using latest technology with cost competitiveness, quality and production volumes in a better way than hand-based production.
The Company has consistently witnessed a robust growth rate of 30% to 40% in business sales in the last few years. The current market scenario for textiles is even better than the last year. Moreover, infusion of new capital and leveraging Company’s allied business divisions will help us maintain growth. The Company is already into selling Lehengas through its wholesale channel at Surat. We have tapped a good number of retail clients across the Country and have recognized the huge potential in the niche Lehenga segment. Additionally, the Company operates its own retail showrooms in Rajasthan which are expected to get an advantage as selling points of the Lehengas.
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