Can the Rs 400-cr brand beat the odds at a time when every apparel brand is out to woo the youth?
If only wearing the right kind of clothes helped us have less stressful days at work. At least it’s true in the latest commercial by Allen Solly where donning attire from the ‘work casual’ collection of the brand livens the atmosphere and helps keep stress at bay.
And with this, Allen Solly, the Rs 400 crore brand from the Madura Fashion and Lifestyle portfolio is once again bringing back its focus on the Friday dressing positioning, a concept it pioneered when it launched the brand in 1993. Back then, when ‘blues and whites’ were the dress colours of corporate India, Allen Solly redefined the rules by presenting a wardrobe of relaxed formal wear in bright colours.
In 2009, the brand’s essence ‘Friday Dressing’, took a back seat when the company attempted to extend the brand beyond ‘work casual’ to casual wear meant for all occasions. A brand tagline My World, My Way was created to signify the brand’s new direction.
| ALLEN SOLLY: A SNAPSHOT Turnover (FY2010-11) * 75% of revenue from ‘work casuals’ whereas 25 per cent from ‘casuals’ * 75% of revenue from menswear, 25% from womenswear * 40% of revenue from exclusive brand outlets, 60% from multi-brand outlets * More than half the business from top 8 cities * Accessories bring less than 5 per cent of revenue |
But, recently, the brand has necessitated a course correction, going back to its core philosophy of Friday Dressing. Allen Solly brand head Sooraj Bhat spearheading the brand for the six months dismisses any confusion in the brand’s mantra. He explains, “Two years ago, when we launched casual wear we wanted to build the portfolio; hence the focus was different. While we will continue to grow casual wear which contributes 25 per cent to our business, we will pay more attention on the larger chunk, work casuals where the opportunity is immense,” says Bhat.
He might be right. As Technopak data points out, the branded casual wear market is growing rapidly in India. It is estimated at $2.3 billion (Rs 11,399 crore) and is expected to double by 2015. A significant part of this growth will be driven by casual wear worn at the work place. “With the growth in multinational offices and services sector, employees are allowed to wear business casual attire,” says Purnendu Kumar, associate vice president, Technopak. Mens is still the largest chunk of casual wear, but womenswear too, is gathering pace with the increasing number of women entering the workforce.
Competition is stiff though. Raymond Apparel’s Park Avenue recently extended into business casuals, whereas the market is flooded with others like Indian Terrain, Color Plus, Blackberrys, Benetton, and Madura’s sister brands like Louis Philippe and Van Heusen who have limited work casual offerings.
But competition does not deter Bhat. In fact, he is counting on his team of 15 in-house designers to not only innovate in existing categories but also steer the brand into newer areas like t-shirts and unstructured jacket lines for work. “Trousers has been an area of strength for us, and we are doing a lot of innovations in chinos through different fits and washes,” says Bhat. Unlike most brands where shirts bring in close to 75 per cent of business, for Allen Solly the revenue from trousers is almost equal to shirts. Bhat sees scope in womenswear too, and the existing ‘casual’ line for women will be extended to work casual early next year.
To occupy a larger chunk of the wardrobe, Allen Solly proposes to scale up the accessories business, which is currently limited to ‘apparel-related’ accessories like socks and ties. Next on the agenda is bags and shoes. “As the market matures, the trend of coordinating with apparel is catching on,” says Bhat. Today, accessories are bit contributors to Allen Solly sales, but Bhat believes ‘shoes and bags’ can be standalone businesses by itself.
Bhat knows to maintain the compounded annual growth rate (CAGR) of 30 per cent, increasing distribution will be key. It currently retails through 100 exclusive outlets (130 by end of year) and 400 multi-brand outlets, largely restricted to top eight cities, where 50 per cent of its revenues come from. However, Bhat sees larger opportunity in the smaller cities. “We are seeing a lot of traction in cities like Ranchi, where we opened five months back, and Trivandrum where we opened last year,” says Bhat. True, retail is moving from high street to malls, but Bhat believes there is still a lot of unexploited catchment areas on high streets and such stores will continue to feature on Allen Solly’s retail footprint.
To lock in consumers, Allen Solly launched a revamped loyalty program Solly, 18 months ago. It has a customer base of 150,000 members, who account for 25 per cent of total sales. “There is some loyalty and 20 per cent of the card members are repeat customers,” says Bhat.
While Bhat is happy with the brand’s progress, experts claim, going forward, managing the diverse portfolio will be a challenge. Add to that the task of keeping a fickle shopper hooked, at a time when every apparel brand is out to woo the youth. Can Allen Solly beat the odds?
