Tempted by a Rs 28,000 crore market, Madura Garments has taken three of its grown-up brands into kids’ wear. Why three? And why not the others?
In 2001, apparel maker Madura Garments discovered that far too many women were interested in its trousers shelves, which were predominantly meant for men. When the Aditya Birla Group company — it owns brands like Van Heusen, Louis Philippe, Peter England, Allen Solly and Esprit — sought to unravel the mystery, it turned out that it was largely women buying sizes 26 and 28 in the company’s men’s trousers range.
Quick on the take, Madura, a predominantly menswear outfit at that time, became the first to introduce a western wear collection for women. Since then, several other traditionally male-oriented labels have expanded their range to include women’s clothing: Provogue, Scullers, Blackberry, Arrow, Wills Lifestyle, ColorPlus, Park Avenue, Excalibur and Zodiac.
Seven years after bringing the female gender into its fold, Madura is looking at children. In the last few weeks, Peter England, Allen Solly and Esprit —which so far catered only to grown-ups — have launched apparel for children aged up to 12 years.
Much like the last time, Madura’s rivals, including ColorPlus and Spencer’s Retail, have followed suit. This has raised the decibels in an already competitive kids’ wear market, compelling incumbents like Gini n Jony and Lilliput Kidswear to draw up fresh plans.
Tailor-made
So what is it about the children’s apparel market that has the grown-ups all agog? The rationale is simple. According to retail consultancy Technopak Advisors, the kids’ wear market in India is worth Rs 17,300 crore a year and growing at 16 per cent annually. There is another Rs 11,500 crore to be made out of kids’ uniforms every year, a figure that is growing at over 23 per cent. Put the two together and the total kids’ wear market stands at Rs 28,800 crore with an average growth rate of 18 per cent.
“Between 1991 and 2008, the disposable income in India has increased from roughly 40 per cent of the family income to 70 per cent. What does the family do with this? Fridge, washing machine, flat television, small car, microwave... after that, what? Spoil yourself, your children, your cat, your dog,” says Kiran Khalap, co-founder of brand consultancy Chlorophyll.
At present, there is not enough availability of branded and quality merchandise for children and infants in India. Besides, functional aspects like comfort and styling are being increasingly sought and this offers immense potential for brands in this category.
“The concept of brands is slowly catching on in this segment. Catmoss, Gini n Jony, Lilliput, Lee Kids, Zapp are some of the major brands which are present there. Mothercare, the leading international mom and kids’ goods retailer, has entered the Indian market through Shopper’s Stop. Brands traditionally selling only menswear and women’s wear are also expanding their product range to kids’ wear,” says Technopak’s Baqar Naqvi.
Madura and the others have fallen to the lure of this lucre. “A void was felt in the branded kids’ wear market and the opportunity to play in this segment was quite attractive. It was then decided to enter the segment through multiple routes and brands of Madura Garments,” says Vikram Rao, business director, textiles and apparel, Aditya Birla Group.
The others echo this sentiment. “Today in India we need children’s clothing to be available in a better way,” says Ashesh Amin, the head of ColorPlus.
Both Allen Solly and Peter England are male-oriented, while Esprit is a premium men’s and women’s brand. Still, with all three of the brands, the company had to ensure that it was not just tweaking the clothes to fit a child. The key elements of any apparel retail business are merchandise, design and the retail environment, each of which was meticulously looked into.
Take Peter England, which put in place separate teams to address the three elements. On the design front, an exclusive team decides the fabric, style, colours and patterns for kids’ wear. There is a separate merchandising and sourcing team dedicated to the cause.
International trends are given an Indian touch. For instance, considering the country’s tropical climate, the company avoids materials like cots wool, polyester and nylon. “It is really the best of the east and west,” quips Peter England People’s chief executive officer, Zeena Freeman.
Equally important, especially for what used to be a predominantly menswear brand, is the retail environment. Madura is aware that simply stocking smaller clothes in their showrooms is not enough. The company is paying attention to the nitty-gritty like store staff, wall colours and mannequins in a way that appeals to both mothers and children. The result is colourful and vibrant floors in Peter England People, or PEP.
Peter England stores will have a play area where kids can watch television, play with toys, or simply lounge around. Likewise,
Esprit has given its kids’ section a new identity with suitable mannequins, a new logo and racks that are accessible to children.
As for their merchandise, the premium brand relies on international trends and research that target younger, upscale mothers.
Allen Solly, for its part, is still test marketing in three stores.
The big picture
It is not just about Madura changing its product mix. It is as much about how. Instead of selling its wares at multi-brand outlets and exclusive branded outlets, Madura is keen on becoming a specialty retail brand offering end-to-end wardrobe solutions under one rather large roof. In line with that, it launched the Peter England People concept.
“Our latest initiative is not just about the flourishing kids’ wear market, it is also about us moving into the family store concept,” explains Rao. “Peter England People caters to the needs of the family that wishes to wear fashionable clothes with international styling at accessible prices. The intent of the brand is to create a fun environment for the entire family for fashion shopping,” adds Freeman.
| ON AN EXPANSION SPREE | ||
| Brand |
Number of stores
| |
| 2008 | 2009 (estimated) | |
| Gini n Jony | 160 | 200 |
| Lilliput | 112 | 500 |
| PEP | 5 | 90 |
| Esprit | 33 | 70 |
| The apparel market in India Total size: Rs 56,000 crore Organised: Rs 11,200 crore (20% of unorganised) Source: Technopak Advisors | ||
In 2005, only 10 per cent of Madura’s brands were sold through direct retail as multi-brand outlets, department stores and franchisees registered the better part of the top line. Today, the company, through direct retail, garners up to 40 per cent of the sales. Over the next three years, it predicts that figure to go up to 70-80 per cent. Earlier a typical Madura store would be spread over 200-500 square feet of space in Shopper’s Stop or Lifestyle; now, it has the luxury of 10,000-12,000 square feet, with children’s clothing occupying approximately 1,800 square feet.
Indeed, the expectations are just as big. Five years from now, Madura Garments expects to deliver a turnover of Rs 6,000 crore compared with the 1,000-odd crore it made last year. Of that PEP is estimated to rake in Rs 1,500 crore, with the kids’ segment accounting for 15 per cent of that.
No doubt, the numbers sound encouraging, but there is concern that the brand is putting its fingers in too many pies and that could hurt it. Instead, why not establish a single unit with a distinct children’s identity — much like what Raymond did with Zapp?
Analysts are divided on the point. Some of them see the positives in creating a separate entity, while others like Naqvi of Technopak feel the multiproduct category environment is better. “Departmental stores like Shopper’s Stop, Lifestyle and Globus have traditionally done well with separate kids’ wear zoning as compared to stand-alone kids’ wear stores. Madura is trying to leverage the brand equity of brands like Peter England and Allen Solly,” he says.
Khalap of Chlorophyll shares the view. “Analyse these brands — Allen Solly, Peter England — and you will realise that their core is segment- and category-agnostic. Their appeal is not male-specific, unlike say, Axe. If Peter England is about ‘no nonsense, no grandstanding’, that core translates easily into women’s as well as children’s wear. Same with Allen Solly.”
In that case, why not extend the other brands in the stable, like Van Heusen and Louis Philippe, into kids’ wear? “Those would be a force fit as Van Heusen and Louis Philippe are hardcore corporate brands. Allen Solly and Peter England, on the other hand, cater to smart casuals and to both men and women. Hence, converting them to people stores would be a logical move,” says Rao.
Silent and steady
Curiously, for a company attempting a course correction, Madura Garments has been relatively silent. There are no television commercials, minimal digital communication and no shouting from the roof tops. On the contrary, the garment company is betting on in-store advertising and some outdoor communication. “It is not that we are silent. Right now we just have five PEP stores and three Allen Solly stores with kids’ wear. It does not make sense to advertise on a national level now,” says Rao.
Rival ColorPlus, which anyway appears to believe in discreet advertising, is not about to turn boorish either. “We don’t have television commercials right now; we are banking on footfalls of our menswear customers, thus targeting every ColorPlus customer with a kid,” adds Ashesh Amin.
However, it is this restrained advertising, combined with Madura stores’ limited presence in the country, which may play the spoilsport. Both Esprit’s kids’ wear stores and PEP’s family stores have sparse presence in the country, with one store each in Delhi, Bangalore, Mumbai and Gurgaon. PEP is also present in Hyderabad while Esprit also has a kids’ wear store in Chandigarh.
Meanwhile, Gini n Jony is going into Tier II and Tier III cities. Lilliput is on course to increase its outlets from 112 in 2007 to 500 by 2009.
Madura is opening seven more PEP stores by the end of the year while Esprit and Allen Solly will cut the ribbons for 30 and 13 stores, respectively, by the end of 2009. Whatever else happens, the big battle for small clothes has begun.
