Our focus is to capture the 'full wallet' of our customers: Raymond

Interview with Gautam Hari Singhania, CMD, Raymond Group

Aiming to improve services, fabric-to-fashion company Raymond Ltd has started reaching out to customers by setting up manufacturing units closer to the market. However, "we continue to stay committed to the ‘Make in India’ initiative", says Gautam Hari Singhania, Chairman and Managing Director of Raymond Group, in an exclusive interview with Dilip Kumar Jha. Edited excerpts:

Raymond has expanded its footprint through the acquisition of a garment unit in the south, land in Ethiopia and office spaces in many countries to woo the Indian community abroad. What is the strategy?

We are the largest manufacturer of suits in the country. Our garment business is based largely on B2B exports, serving some of the top global brands in fashion and retail space. Out of the 55 countries across five continents where we supply our products, the US accounts for 30 per cent of the total supply, while Europe and Japan account for 25 per cent and 20 per cent respectively. Exports account for 15 per cent of the overall revenue. We now want to move from an 'export-only’ model to an approach focusing on developing the market and increasing business by establishing a face to the name in select regions. We have shortlisted a few markets where we would like to be present and invest in building deeper relationships and strategic partnerships with fashion brands and top retailers across the US, Europe, UK, Middle East, South Asia and Japan. We have recently set up an office in Dubai to cater to customers in Gulf countries, South and Central Asia and East Africa. Our existing London office caters to customers in UK and Europe. We are in the process of opening an office in New York that will primarily cater to the customers in North America. We continue to stay committed to the ‘Make in India’ initiative through capacity expansion of Kolhapur and Yawatnal plants. Moreover, we are setting up a greenfield textile project in Amaravati. The idea behind setting up a garments unit in Ethiopia, the fastest growing and stable economy in the African continent, is to mitigate our export risks. Ethiopia has duty free access to the US and European markets, making our products competitively priced for global markets. With over 2 million jackets per year, Ethiopia will be among the largest single-location suit manufacturing facility in the world. Ethiopian unit will entail a capex of Rs 150-cr in phase-1.

Most of Raymond’s profit is coming from the fabric segment. This means that the apparel segment needs some boost. How is Raymond planning to strengthen it?

Raymond is a strong player in the fabric segment and commands over 80 per cent of the market share. Over the past three years, we have aggressively invested in manufacturing shirts in the B2C branded fabric portfolio and have now emerged as a dominant market leader in this segment too. Apparels is another strategic business for Raymond with four power brands in our portfolio– Raymond, Park Avenue, Parx and Color Plus. We are among the three biggest apparel brand players in India. For the product, our focus is to sharpen the brand's positioning by leveraging each brand to its full potential, hence capturing the ‘full wallet’ of our customers. We have recently introduced the 'Raymond Whites' series in the country, coupled with other world-class launches, including light-weight jackets and top-end sweaters. We are also expanding our retail footprint through exclusive brand stores and multi-brand stores. Besides expansion, we are also renovating and digitising our existing stores to enhance the shopping experience in retail. Our apparel business has been witnessing strong double-digit growth over the past three years and we will continue to scale business to attain profitable market leadership in this segment.

In your apparel segment, the youth-attracting brands aren't as appealing as other brands in this industry. How will you change consumers' perception to catch the youth's fancy? 

Raymond caters to over 20 million unique users across demographics and age groups. We have over four million customers on our loyalty platform. We cater to all consumer segments with our diversified product formats and price spectrum. Each brand in our portfolio has a sharp role assigned in the context of brand positioning and product offering. Like Parx is a sharp youth-oriented brand targeting customers aged between 18 to 24 years. Parx is the fastest growing casual brand in the country offering value based pricing. Whereas, Park Avenue has been a preferred choice for the 'alpha male' over the years with a strong focus on fashion formal offerings for the young generation. The fact that we have extended our product line to enter the women’s apparel and innerwear segments is testimony to the brand’s successful journey.

Denim has been a growing segment faster than any other segments in the textile sector. While you have already captured some fancy, are there any plans to strengthen your the denim segment?

Denim is indeed a fast growing segment in the Indian context. It is growing increasingly popular across all demographics. Our denim division is a market leader in the fabric and garment segment. Through various trade shows abroad and a strong network in India, we keep launching new and innovative products to cater to the ever-changing requirements of our customers. We are also increasing our investments in design and development apart from using local and international talent for support.

Many of your competitors have tied up with global brands. Is there any such proposal in Raymond's kitty?

Given the fact that Raymond is a market leader in the fabric and apparel segment and the No. 1 retailer in the country, we keep getting multiple proposals from global brands and fashion retailers for strategic partnerships. As a policy, we keep evaluating these options. However, our focus at present is to upscale and grow our existing in-house power brands– Park Avenue, Raymond Ready-to-Wear, ColorPlus and Parx. 

Demonetisation has lowered textile sales. What is its impact on Raymond and how are you coping with this challenge?

The cash-dependent wholesale channel got temporarily impacted due to demonetisation and the squeeze in liquidity affected our business for a short period of time. As the cash is getting restored, we are witnessing a pick-up in sales. Demand is now coming back to normal and we are expecting a better performance in the current quarter. Post demonetisation, we have assisted our strategic vendors and channel partners in terms of facilitating finances and credit support. We have integrated our stores with all leading digital payment gateways, e-wallets and we are also offering EMI facility for large purchases. Demonetisation is positive for the organised sector businesses that are tax-compliant and are instrumental in formalising the economy. Overall, I believe that this bold step should help improve India’s fiscal and monetary position.