Interview with Akhil Jain

Akhil Jain
Executive Director
Madame

Full recovery is atleast a year away

The $40 million Ludhiana-headquartered Madame is perhaps among the most successful fast fashion brands in India, having catered to 500,000 unique customers at its almost 500+ exclusive + concessionaire + online stores since its launch. Akhil Jain, executive director, Madame, talks about how the business of Madame as a brand has been affected by covid-19 and the measures it has taken to put business back on track.

What were the footfalls and conversion rate of customers in your stores prior to COVID-19, and what are the figures now?

With covid-19, footfalls did take a colossal hit falling as low as 15 per cent during Unlock 1.0, but there were signs of significant improvements during Unlock 4.0. Customer repeats are minimal. Keeping all sanitization and safety procedures in place, the high street stores in tier-II and tier-III towns have shown quick recovery, while stores in metros and shopping malls are still failing to invite credible footfalls. Overall, we expect the footfalls to stabilise post- Diwali and match 100 per cent only by Q2 next year. Online business has shown a 1.7x improvement as fundamental demand still exists, but due to fear of the coronavirus, more customers are adapting to buying fashion online.

How many stores have closed? Any more closures expected?

Due to commercial non-viability, we had to forgo as many as five stores in the last one quarter. Fortunately, we shall be seeing new stores in same market locations coming up during the third and fourth quarters of this year on a better sustainable model. Also, we had planned 22 new stores pre-covid, but hat projection is now limited to seven for the year, of which one store has already been launched and three more shall be operational very soon. Further operational decision will be impacted depending on the status of footfalls and sales mapping to the revised ABP (annual business plan).

Which of your stores are worst hit and in which city/town?

The stores in metros and tier-I towns are faring the worst. Cities like Delhi, Gurugram and Lucknow are struggling to match the rest of India. Though most of the landlords have come to the rescue of the tenants and shown keen partnership instincts, poor footfalls still haunt stores especially in shopping malls. Airport retailing has taken a severe hit, where the retail is still not entirely operational.

What are the new trends that you are witnessing in shopping habits of people?

The concept of comfort fashion has come to the forefront. During Unlock 1.0, we witnessed a large inclination towards basics-tee, pyjama, loungewear and nightwear categories. With footfalls rising and customers moving back to work, offices and smaller get-togethers, fast fashion demand is coming back on track. We are witnessing a steady rise in the high fashion categories like dresses and formalwear, but it will be the summer of '21 that such categories would bring the justified revenues again. Having a hybrid business model and own manufacturing facility, we were quick to adapt and tweaked the style to have more comfortable attributes seeing the adaptation of the end-consumer.

Based on consumer preferences, how has your business altered?

Business and operations have been altered with the changing winds. While business survives, what has changed are marketing strategies with the digital game getting a perfect stage to showcase its potential. We, like other major retail brands, are working on an omnichannel marketing to up sales. Till then, we are aiming at a zero-risk model trying to maximise output from our existing infrastructure. This is the perfect time for 'Make in India' and 'Vocal for Local' movements to gather momentum. We also notice some good news coming out of this. We see our carbon footprint reducing significantly with less commercial movement. Business will keep shaping up in new ways until full recovery takes place which we estimate is a good year away as of now.

With people restricting outside travel, ecommerce is gaining more popularity. How are you gearing up to further ensure an omnichannel presence for them?

Technology has been a saviour for most businesses, and I would say a boon for the retail industry. We will be focusing on online sales through our website. Technology has also been helpful in sending catalogues with availability of door deliveries in tier-II and tier-III. WhatsApp has also been a great business tool in these trying times. In small towns and cities, personalised shopping has been manifested through WhatsApp where images of apparel are being sent to the prospective buyer and goods are delivered contactless with payments occurring digitally. We have experienced an 80 per cent jump in sales online through the website. Omnichannel marketing is in the pipeline for Madame and work for it continues. We have also started omnichannel marketing at a few stores to reduce human interaction with digital payments accepted across stores in the country. We are also testing our omnichannel marketing at a dozen stores so that the brand is well prepared as we come closer to the winter season.

Is Madame accelerating further adoption of technology across its supply chain leading up to points of sale?

Yes, as I mentioned, technology has come to the rescue of businesses. We are now using social media tools to reach targeted sales conversions. We are sending product catalogues to old and new customers and even making sure the goods are delivered to their doorsteps in smaller towns and cities. And, this has really helped the business. It has added a certain sense of personalisation which a lot of clients like and in fact this has resulted in increased sales for us as a brand.

Work at the shop floor has also been affected because of the norms of social distancing. What steps are being taken to train shop floor personnel for this?

Our employees have been given the basic and standardised delivery of the hygiene protocols to be followed day in and out. We have educated them about the sanitisation of the entire store, sanitisation of trial rooms after each use, steam ironing and product isolation after a product has been touched or tried in the trial room. We are doing a two-way sanitisation process where we are also observing customer behaviour in-store and their feedback with our sanitization process. In doing so we are learning new ways and things that need to be sanitized based on customer behaviours. An app-based learning mechanism has been implemented to ensure that the staff is well-informed and is well-equipped to serve the customer.

What new innovations have you come up with or likely to come up with to meet the demands of a covid-hit world?

Fashion is all about innovation and adaptation. The product range is always getting tweaked owing to changes in consumer preferences. Use of technology in operations and retailing is being explored aggressively. With omnichannel marketing, we are aiming to reach 100 per cent of our customers whereby they can order online and pick up from a neighbourhood store. Work from home / remote operations that were only limited to software companies have become a routine practice with companies like ours. Even the employees feel quite relaxed and safe once the organisation has adapted to this concept. Nevertheless, man is a social animal and I feel web conferences will soon give way to board room discussions again.

By when are you expecting the revival process to commence in India?

As a pandemic is once-a-century affair, nothing can be projected thoroughly. As per our industry, quarter two of next year seems to be apt to expect a 100 per cent revival. As transactions and resource movements have been limited, a lot of emphasis is being put to drastically improve back-end operations and HR processes.

How would you describe the market for fashion wear in India after many decades in this industry? What is the annual growth rate in this niche?

The fashion wear space in India has rarely seen slumps. It has maintained its buoyancy in a market otherwise ridden with economic ups and downs. Owing to the large population, the fashion apparel industry in India can rely on the growth of the fashion-conscious consumer who has more disposable income for purchasing branded clothing and accessories. The fashion wear market in India is expected to be worth $53.7 billion in 2020, making it the sixth largest globally, according to the fourth annual State of Fashion report by Business of Fashion and McKinsey & Company.

At present, what is your loyal customer base? At what rate is this growing?

Madame, as a fashion brand in India, has sustained its market and niche. The two main reasons for this is the loyal customer base that has been the strength behind the brand and the consistency and hard work that the brand has put in to compete with international and domestic brands for market share. Every year, we attend to 500,000 unique customers at the stores and service 50,000 online. We are positioned as an international brand in the Indian market. Most people don't know yet that we are a Ludhiana-based company. We sell around 11 lakh pieces a year at our exclusive stores.

Customer loyalty supports us. We keep up with global fashion trends with seasonal collections at affordable rates. Initially, we had a small market for westernwear in India; today we have expanded beyond our expectations. We have old customers who still buy from us; so, we have maintained our loyalty and trust in them.

What is the USP of the fashion wear products retailed by Madame?

Madame has an amazing brand positioning in the domestic market. In order to control and maintain this position we have infused global trends and fashion from around the globe into our collections. We are more or less a one-stop solution for all luxury apparel, shoes, sunglasses, handbags and jewellery. I don't think we have any Indian brand that sells numerous categories under its single brand entity. Plus, we are an affordable fast fashion company that suits each pocket size and are well placed in the mid-premium category.

What are some of the trends you have noticed related to fashion wear in Indian consumers?

Madame is an aspirational fast fashion brand for the brand conscious woman of modern India. Having a strong and loyal customer base has given us deep insights into the fashion wear trends of the Indian consumer. We have noticed that new fabrics, patterns, styles and experimentation with styles in tune with the international brand trends is the key that fits any lock in the fashion industry. Change is what we have permanently imbibed as a fashion brand in India. Fashionistas always want a change and hence we diligently roll out seasonal collections; that is our focus. Vero Moda, Mango and Cover Story are our competitors, but we continue working on our own goals irrespective of that.

Where is the raw material for your fashion wear sourced from?

Since inception, we have sourced supplies from small and indigenous vendors in order to support the local industry. To take it one step further we also encourage our suppliers to source locally-made raw materials and services so that our downstream supply chain also supports local procurement focused on building around the theme of selfreliance. There is also a reason we prefer small-scale and local vendors-that is because they have quicker turnaround times making it a win-win situation for both us and them. We have always strongly believed in Make in India and we are happy that it has taken a national flavour through the #VocalForLocal campaign. Being a known brand, we are aware and very conscious of the smallest factor that goes into making the end product.

Do you have your own manufacturing facility? What is the production capacity?

The registered company is named Jain Amar. It is a self-manufacturing unit located at multiple locations. Our facilities span 700,000 sq ft of space with 2,000 workers directly employed by us. We use semi- and fully-automated machinery from Japan, Germany and Korea that ensure high-quality production. The plants have an annual manufacturing capacity of over 2 million apparel units. A central distribution system with a volume to hold over 500,000 units of inventory spans over 50,000 sq ft. Using the theory of pushand- pull model of merchandising, this utomated distribution centre (DC) ensures dispatches across the retail sphere within a stipulated time frame of under 48 hours.

What is the size of the design team at Madame? How do you decide the trends for each season?

The in-house design team consists of 25 designers from premier institutes across the country. The participation in international fashion weeks always gives an edge to the design team to be able to forecast local trends as well. Subscription to forecast tools provides great assistance.

How many collections do you come up with each year?

Our brand has a wide range of clothes and accessories for women with fast fashion and in-trend merchandise for causal and partywear. With an appealing international image, we have at leastseven collections each year. The number of styles is subjective and depends on the product line and accessories chosen for a particular collection or season.

What about your retail presence?

Exclusive brand stores: 150 in 78 cities; concessioners in large format and multi-brand stores: 300; and, online channels: 6.

Which are your major markets?

North, East and South India are strong markets for the brand and minor penetration is also visible in West. We have less than 1 per cent share in exports.

Which was your first flagship store; when was it opened?

Our first standalone store was launched in Mumbai in 2002. Today, we are close to 150+ standalone stores across the country.

What is your eligibility criterion for selecting franchisees?

Only one criterion: passion about retail. We do not work on a master franchisee concept, but are happy to do one on one selection of key players in the market before offering the franchisee.

Which price points sell well in fashion wear? Which categories are faring well?

The average selling price (ASP) of the brand stands at a sweet ₹1,500 which positions us in the category of affordable fast fashion.

What has the sales been like on your website vis-a-vis your stores?

Online sales last fiscal was about 4 per cent of the entire business, which is being projected at 7 per cent this year. Of this, our own portal glamly.com is expected to contribute 15 per cent and the rest is shared by marketplace portals like Myntra, Ajio, Amazon, Flipkart and Tata Cliq.

Please share details about the last two fiscal years.

The 2019-20 year ended at a $40 million topline revenue.

Now, going back-how did the brand come about?

Jain Amar was founded by CL Jain in 1939. The co-founders of brand Madame are his grandsons, 65-yearold Sunil Jain and 60-year-old Bipan Jain. In a zest to expand horizons, Bipan Jain has travelled to over 50 countries. His futuristic vision and strong business acumen have inspired his colleagues to help the organization excel with its brands and products. He spearheads innovations. On the other hand, Sunil Jain is a true guardian of the organisation. His analytical skills and efficient financial management techniques have ensured the good health of the company for decades. Initially, we had a small market for westernwear in India. A woman who wore Madame 15 years ago is still our customer and prefers Madame over any other brand. The biggest challenge was the imports from China and Thailand. Today, we are very well positioned. We have an international appeal in the domestic market with very few people who know that we are very much an Indian brand with manufacturing unit based out of Ludhiana. We are competing with biggest Indian fashion brands and are expecting our brand position to strengthen with time.

In the early 2010s, we relaunched the brand with a fresh communication strategy in traditional formats, store ambience and business models. That certainly helped the brand gain further recognition. Airport retailing did wonders to the brand perception.

How is Madame marketing its products with respect to other fast fashion brands (both foreign established and Indian brands)?

We have retail stores, franchisees, shop in shops, and distribution as our business model. The brand relies on 'The Right Product and The Right Placement' to market the product. The brand is located at premium locations to get the desired footfalls. Constant remodelling of stores every 30 months ensures that ambience of the stores is well managed. Madame engages in various ATL and BTL activities and the marketing spend is nearly 5 per cent of the business revenue.

Do you plan to expand your current product portfolio?

Madame has a 10 per cent business representation in the market that it operates in with respect to its competitors. The market is ever expanding with domestic brands diversifying into this category and foreign players entering every year. The company has a turnover of $40 million of which 85 per cent is contributed by the premier label Madame. The standalone stores cover a space of 150,000 sq ft in upmarket high streets and malls. In the coming two years, we do not plan to expand; we are in fact aiming at consolidation. In terms of product portfolio, it will be in tune with the demand. As demand, tastes and preferences have changed, we want to adopt a zero-risk model-at least in the very near future.

When most retailers are playing safe, you are set to launch some more stores in tier-II cities.

Yes, that is true. We are doing that because we see a strong demand in tier-II cities. The demand is very robust and at 70 per cent precovid levels. In cities where there is a very high incidence of covid-19, the physical stores are not getting many footfalls. So, to ensure sustenance we are exploring better and more lucrative avenues. Online sales have surged by almost 50 per cent, and this is a mix of pent-up demand, better inventory availability and ease of access.

What steps are you taking in terms of sustainability across your supply chain?

Sustainability is the key; it's the only way out. We are adopting a no-growth strategy until the second quarter of FY 2021-22. Sustainability and strengthening of backend operations is the main agenda for now. From an expansion mode, most companies including ours have changed gears to the sustainability mode. Fixed cost optimisation, backend operations and digitalisation would be the focus for next two quarters. Sustaining retail amid the pandemic is our only agenda and within five years we aim to double our targets in turnover with two overseas offices.

The talk today has circled back to slow fashion. Any change in the number of collections or pieces in each collection or choice of fabric and accessories for your product portfolio?

No, we are a fast fashion brand and we do not choose to change the style of operations or our approach to the existing business.

What are your future plans?

The future for us is slightly ahead of two years. We will be building franchisees across India and aim to enter newer markets and newer product categories. Technology will be our biggest asset and we intend to use it well by investing productively for the same. Our focus will be towards outsourcing much of our fashion line, though our own factories will be for our forthcoming seasons' lines. Also, we want to understand the Indian women's changing tastes with time, and our focus will be on deeper engagement with them. Growth of our own online store will also be a strong focus for the next two years.

This article was first published in the December 2020 edition of the print magazine.

Published on: 12/02/2021

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.