 "What happened to the Reid & Taylor brand?")
A Reid & Taylor store in the busy Flora Fountain area of Mumbai’s Fort area has a banner on the front which says: '50% per cent off - End of the season sale.’
When most brands and retailers have long wound up the 'end of season sale', it is unusual for anyone to hold a discounted sale for two months.
The store staff non-chalantly says that the merchandise is old and it is part of clearance sale and fresh stock will come within a month.
The store signifies the the current state of the over-175-year-old Scottish brand in the country, which once had high brand recall.
Reid & Taylor was launched by S Kumar’s Nationwide (SKNL) in India in 1998 with a fabric plant at Mysuru in Karnataka, which produces worsted and poly viscose suiting.
SKNL, which owned rights to manufacture and market the brand here, sells formal and casual wear suits, jackets, trousers, shirts, ties and accessories, T-shirts, jeans and weekend wear.
The apparel was produced by a dedicated facility in Bengaluru.
SKNL, which owned rights to manufacture and market the brand here, sells formal and casual wear suits, jackets, trousers, shirts, ties and accessories, T-shirts, jeans and weekend wear.
The apparel was produced by a dedicated facility in Bengaluru.
Then, SKNL claimed Reid & Taylor was the finest cloth that was available in the country and was the second largest suiting brand in India in the luxury segment.
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SKNL did some high octane advertising and marketing using its brand ambassador- Bollywood Superstar Amitabh Bachchan- and held polo championships to promote the brand.
The high point came Singapore’s wealth fund GIC invested in the brand for Rs 900 crore. SKNL planned an ambitious Rs 1,000 crore initial public offer (IPO) for the brand in 2011 , which had to be shelved due to poor market conditions. Its plans to open 15 flagship stores and 160 exclusive stores for Reid & Taylor did not materialise.
Today, it owns couple of company-owned stores in cities such as Mumbai and franchisee stores elsewhere.
Its advertisements have vanished from everywhere - TV, print and outdoor but its products sell on e-commerce stores on discount.
So how did brand go down?
Reid & Taylor’s problems are synonymous with that of its parent’s financial woes.
Riding the boom years, SKNL did multiple acquisitions and had ambitious plans which led to a debt pile up of Rs 4,484 crore as of March 2013, causing the company to default on its interest commitments and setting off a host of problems.
At its peak in FY12, SKNL's profits jumped to Rs 470.84 crore, but soon it fell on bad times, leading the promoters to pledge their shares to financial institutions.
A former executive, who does not want to be named, says, "The company drew up plans thinking funds will come but that did not happen. When you are highly leveraged, interest burden will suffocate you." Sure enough, things went from bad to worse as the financial institutions started redeeming the pledged shares. According to BSE data, the promoter group and entities now hold just 3.59% stake in the company.
Shelving of the IPO coupled with slowdown in the economy did not help the brand either, say experts.
According to Prashant Agarwal, joint managing director at Wazir Advisors, SKNL cut corners everywhere after the financial problems started.
“They spent less on advertsing and marketing, produced less and limited the options which all impacted the brand,” says Agarwal.
According to him, if a brand is in the market, its products should be available in MBOs (multi brand outlets) and EBOs (exclusive brand outlets) in full range and the brand should adveritise for top of mind recall.
“Their products were available more in MBOs than EBOs. If you advertise less, your sales will also reduce,” he adds.
Nitin Kasliwal, chairman and managing director of SKNL declined to talk about Reid & Taylor.
Says a former executive with the company: "It followed a strong brand ambassador-led strategy but did not deliver on the operations front. I feel somewhere it lost the customer connect due to lack of innovation in merchandise and marketing."
A chief executive of a Mumbai-based textile company says SKNL paid high rentals while opening its stores of brands such as Reid & Taylor and Belmonte in a bid to build valuations which ate into its operating profits.
But Arvind Singhal, chairman of retail consultancy Technopak Advisors recalls that Reid & Taylor was one of the most successful launches in the recent times.
“The brand came from nowhere and became successful. They had good advertising and good product but due to larger issues, the brand faced challenges,” Singhal says.