Cashing in on fashion

Why department store Pantaloon wants to be young and trendy

Kishore Biyani

When the first Pantaloon store opened in Kolkata in 1997, its proposition was clear: to appeal to consumers as "India's family store".

Providing a shopping experience for the family made sense, since even seven years ago, families tended to shop together. The store appealed to middle-class shoppers: Pantaloon garments were serviceable and offered what is the kiss-of-death for fashion: value for money.

But middle-of-the-road is no longer good enough. At Pantaloon Knowledge House, the Mumbai headquarters of the Rs 650-crore Pantaloon Retail, Project New Age Pantaloons is underway.

Its aim: to establish the Pantaloon stores and its brands high up on the style graphs. "Pantaloons will be all about fashion now," says Kishore Biyani, managing director, Pantaloon Retail.

The repositioning started in summer 2003, when the communication and merchandise mix changed, with a focus on fabric ranges and fashion lines.

A new range of garments in stylish linen and "crush" fabrics was introduced and communicated through a new print campaign. The ads marked a change from the earlier campaigns that showed families "" now, it featured trendy young men and women wearing the latest fashions.

The latest campaign, in April this year to launch the summer collection, was similar in execution. In both campaigns, the focus has been on the variety of merchandise lines and the message is clear: Pantaloons stocks the latest designs and fashions.

The accent on fashion has shown up in the changing store layouts as well. Bina Mirchandani, head, category management, points out that the Pantaloon stores no longer stack garments on shelves; they're on display on hangers, like they are in boutiques. "We've imported furniture from Italy to give the stores a contemporary look," she adds.

There's more to Project New Age Pantaloons, though. Biyani points out that "everything" "" from the store identity to branding and even the Pantaloon store name "" will change. "Pantaloons will not be the same store you see now," he says.

What is the reason behind this metamorphosis? One of the triggers for change could be Big Bazaar, Pantaloon's discount store launched in 2002.

Even though Big Bazaar belongs to a different format "" value shopping for the home, from electronics and furnishings to staples and apparel "" Pantaloons could no longer have remained the "family departmental store". "Pantaloons needed to upgrade its image further, to stand out," says a retail consultant.

Biyani doesn't accept that the image upscaling was due to the need to distance Pantaloon from Big Bazaar. "Not many customers really know that Big Bazaar and Pantaloons are owned by the same company," he points out. The larger reason is the changing profile of the Indian shopper.

Students are no longer empty pocket window shoppers: with an increasing number opting for part-time jobs at fast-food outlets and call centres, they have the disposable income to buy what they like.

And population trends have changed, too. At present, roughly 54 per cent of the Indian population is below 25 years and 70 per cent is below 35 years. "Do I need a better reason [to reposition Pantaloon]?" he quips.

If he does, it's there for the taking: young women shoppers are spending more at malls, according to independent as well as company research. Most of that spend is on apparel (apparel is the most important category for departmental stores, contributing to as much as 70 to 75 per cent of revenues).

"But as all stores stock the same national brands, there is little scope for differentiation," says Harminder Sahani, principal and associate director of retail consultancy KSA Technopak. And given the relatively limited choice among national brands for women, they are more enthusiastic about trying out private labels.

That's an area of expertise for Pantaloon: at present, it offers 19 in-house labels; of the seven or eight private brands it has launched in the past two to three years, most target youth and children.

To bring in more attitude and glamour to its in-house offering, Pantaloon has become the sole licensee for international youth brands like UMM and has launched another youth brand Rig, as well as children's-wear labels such as Popeye and Olive Oil. A new club and lounge wear brand called Leone will also be added soon.

Pantaloon's increased thrust on private labels is a function of its captive manufacturing facilities. Currently, only 10 to 15 per cent of the manufacturing for private labels "" 70 per cent men's-wear and 30 per cent women's-wear "" is done at the company's Tarapur plant.

By end-2004, that will increase to 70 per cent (including a few contract manufacturers for some styles or embellishments that need different skills). The rest 30 per cent will largely comprise the licensed brands.

For that, the company is revamping its plant "" by October 2004, capacity will be beefed up from 2,000 pieces to 8,000 pieces a day. Pantaloon is also talking of integrating structured fashion forecasting with the manufacturing process this month onwards.

This will make it easier to react to style and fabric trends more quickly, which is the biggest challenge in fashion apparel manufacture.

Biyani is counting on the vertical integration to help reduce the time-to-market of new collections as well. Although margins in private apparel labels can be up to 50 per cent higher than in national labels, there's immense pressure to sell stocks to allow the next range to come in faster.

That's because fashion clothing needs to change according to trends, which change every one to two months. The longer stocks lie on shelves, the more the company has to undersell, thus losing on margins. "The biggest challenge is fashion forecasting "" and a faster mind-to-market," says Mirchandani.

Currently, it takes Pantaloon about 60 days to bring an outfit from the design stage to the store shelves. That's double the ideal time to get a range in the market, admits Biyani, adding that by the end of the year, the time-to-market will be brought to under 30 days.

That's still better than the Indian average. But then, Pantaloon is benchmarking itself against international chains such as Zara. The Spanish fashion store has over 1,000 outlets across Europe, the US and west Asia.

Its manufacturing process is centralised, so it has a shorter time-to-market: just 20 days. Effectively, that means Zara stores sport new merchandise once in three weeks.

Also, Zara employs "trend-spotters" who keep track of what customers are wearing and buying at Zara stores. This keeps the store in line with what customers really want.

Pantaloon is striving hard to match Zara. But it's not rushing in with the changes, considering that the "family store" image is still quite strong.

In fact, some of the older stores, such as the one at Kolkata's Gariahat, will continue to retain the family store ambience even as the newer ones are made over. Meanwhile, the company is eyeing new stores at multiplexes and malls, in a bid to tap into a younger customer base.

Still, the challenge of appealing to the youth remains. The print campaigns will certainly help, but Pantaloon is taking no chances. On-ground promotions are on the cards, especially for the newer and younger brands.

For instance, for the launch of the UMM label, Pantaloon organised music shows at pubs and discotheques. Customers who bought UMM clothes got invites to the events, where the DJ was dressed in UMM apparel, to drive home the brand's connection with contemporary music.

"UMM is more of a cult brand now," says Jaydeep Shetty, chief"" new business, lifestyle retailing at Pantaloon. Similarly, for outdoorsy clothing brand RIG, Pantaloon will offer shoppers free or discounted weekend adventure packages.

"Such promotions help in conveying the brand personality to the relevant target audience," adds Shetty. Will customers buy that?