ITC has a clear game plan for its mid-priced menswear: Careful store expansion and the star power of a new brand ambassador.
John Players, the mid-priced menswear brand of ITC, is set to begin a new innings after the retail slump that hit apparel brands in the last two years. And a new brand ambassador — actor Ranbir Kapoor who replaced Hrithik Roshan — is just one part of the game plan.
With consumers freeing their purse-strings once again, ITC is betting on opening more John Players exclusive stores. The brand is increasing the number of stores to 300 by this month-end from 225 earlier. But once bitten by overzealous expansion, ITC is now careful about where it sets foot. It does not want to shut shop as it had to do with 30 stores in the last two years.
Atul Chand, chief executive of ITC’s lifestyle retail business division, has a clear plan in mind: “John Players is a mid-priced brand. It is not a destination brand such as Wills Lifestyle and won’t make consumers travel far. We have to take the brand closer to the consumer. He should not have to make an effort to access the brand.”
Course corrections in retail will continue for the brand, Chand adds. “For mid-priced brands, the churn is higher because of competition from local players and the unorganised segment.” With an estimated size of Rs 4,000 crore, the mid-priced menswear segment ranges from Rs 800- 1,500 per item and has regional players such as Turtle, private labels of large format retailers and Madura Garment’s Peter England.
John Players has been growing 12 per cent riding on its same-store sales, which Chand expects to go up to 25 per cent once expansion is underway.
The new stores that are set to open would be smaller but numerous. “For an area which needs a 5,000 square feet store to cater to it, we will have five 1,000 square feet stores. The profitability also improves with smaller stores,” Chand explains. The brand is also available in 1,000-1,100 multi-brand outlets.
Malls, while still part of the retail mix, would be of less focus than high streets. “Mid-priced brands need to get double the volume of neighbouring premium stores to become profitable at same rentals. The volumes are not easy to come by for such brands in malls,” says Chand.
John Players can now eye 30-40 more cities that have 1,00,000-5,00,000 population such as Asansol in West Bengal and Jabalpur in Madhya Pradesh. It has managed to make its existing stores profitable, says Chand. The company has been able to bring down rent by 30-40 per cent in the existing outlets in 140 cities. Analysts put costs per store down to Rs 1,500 per square feet.
With 60 per cent of its sales clocked by its own stores, ITC is keen on upping the number. Exclusive stores also let the brand display its range of denims, jackets, apart from shirts. “We can make John Players wardrobe-focussed rather than specialise in a particular category because we are not weighed down by heritage,” says Chand. That is why, he points out, other brands have been introducing youth-centric sub-brands under their flagship. John Players gets 50 per cent of its volumes from its casualwear range including T-shirts, shirts and denimwear. Its denim range launched in 2009, has been growing faster than the others at 20 per cent and accounts for 15 per cent of John Players’ sale.
The brand is obviously banking on its new star endorser heavily. Chand justifies Ranbir Kapoor’s selction by saying “We needed a strong connection with the youth. At this leg of the brand's journey, Ranbir personifies the changes in the youth’s attitude.”
John Players had been repositioned in 2004 as a semi-formal brand across India, a year after its launch as a formal menswear brand. “When we repositioned John Players, the brand needed a fashion icon like Hrithik Roshan. John Players is now ready for the next stage of moving closer to the youth,” Chand adds.
Slotting 10-12 per cent of the brand turnover (market estimates put John Player's annual sales at Rs 200-250 crore), the brand will make Kapoor the epicentre of its brand communication. “We have lined up on-ground promotion, tying up with his films for promotions and also contests in the social media.” While the mass media campaign is slated to release in April, the Internet already has the making of the ad onYouTube.
The next few months will show if Kapoor can give wings to the brand’s designs on the consumer.
