Arvind was once considered a non-serious apparel brand and retail player after it sold its 40 per cent stake in its joint venture with VF, thereby letting go of the Lee and Wrangler brands. But the textile conglomerate has come a long way since then — evident from its decision last month to acquire the India operations of international apparel brands Debenhams, Next and Nautica.
The three global brands have added a few more feathers to Arvind Lifestyle Brands, subsidiary of Arvind Ltd, which already boasts of an impressive kitty comprising Tommy Hilfiger, US Polo Assn., Elle, Geoffrey Beene, Arrow and the likes. What's more, acquiring the business operations of Debenhams also means Arvind’s foray into the department store segment.
“Most companies these days are investing in being a brand footprint player and Arvind is one of them. It already has its own brand. This acquisition is in tandem with Arvind’s vision to be such a player,” says Harish Bijoor, CEO of Harish Bijoor Consults Inc.
This should not be difficult for Arvind, given the experience it has in managing the Indian franchise of international brands. For instance, in the mass sportswear segment, the company already claims to be a market leader with brands like Ruggers and Cherokee which it sells in Megamart. Add to that, Arvind is gaining ground gradually with brands like Arrow Sport, Izod and USPA in the premium segment and Gant in the super premium segment.
“Nautica will be an addition to our sportswear portfolio in the super premium segment. Arvind has a strong presence in menswear and value retail.
In fact over the last three years with a CAGR of 38 per cent, Arvind is the fastest growing company in the apparel brands and retail space. These new acquisitions will further accelerate our growth and will substantially enhance our position of being the leading player in the brands and retail business,” says J Suresh, managing director and CEO, Arvind Lifestyle Brands Limited and Arvind Retail.
The 38 per cent CAGR in apparel brands and retail space is one of the fastest growth figures in an industry that is growing by 20 per cent. According to Wazir Advisors, a retail and management consulting firm, of the total Rs 200,000 crore worth apparel retail market in 2011, about 50 per cent is branded, wherein the share of international brands is growing.
“Initially, indigenous brands like Color Plus began well in India. However, it takes a lot of time in building indigenous brands in the country. Hence, developing a portfolio of international brands seems to be the obvious choice. Moreover, in mid-premium and premium segments, international brands will rule in the time to come. If one wants to be present in this segment, inorganic growth is the only way,” asserts Prashant Agarwal, joint managing director, Wazir Advisors.
While its peers Reliance and Madura have also been engaged in building international apparel brands portfolio, Arvind, say experts, is much fitter to do the same. “It doesn’t matter whether one is in men’s, women’s or kids’ wear segment if you have the expertise to acquire and manage an international apparel brand franchise. And Arvind is adept in it. Since some years now, the Arvind Brands’ team has gained expertise in logistics, design, supply chain, sourcing, product development, front end management and retail store management - things that are necessary to run a global apparel brands portfolio,” adds Agarwal.
