)
Marks & Spencer (M&S), the British departmental store chain, wants India to be the largest international market outside its home country, in terms of number of stores. So much so that, it is even unveiling a new look of some of its sections in India. Reinforcing faith in the market, despite the flux around FDI in retail, its CEO, Mark Bolland claims that M&S would have a fifth of its new stores in India in the next couple of years.
The volume push comes on the back of the retail brand's rethinking for India. Unlike its other international markets, M&S sells apparels and cosmetics (and not food) under its Indian joint-venture with Mukesh Ambani's Reliance Retail. It had broken off from its earlier partner, Planet Retail, in 2008 to tie up with Reliance Retail for faster expansion.
The retailer is looking to expand to tier II cities such as Surat and Kanpur with 1,500 sq-metre (over 16,000 sq-ft) stores. Larger flagship stores in cities such as Mumbai and Delhi will be supported by smaller stores in the cities to form a hub and spoke model.
It is planning to more than double its retail presence by opening 44 new stores, by 2016, up from the existing count of 36, covering over 0.5 million sq-ft. World over it has 1,200 stores and it plans to add 250 more in cities such as Paris, Amsterdam and Istanbul.
Opening a 35,000 sq-ft flagship store in Mumbai's plush suburb, Bandra, on Monday, Bolland says, "Our flagship stores signal that India is a priority market for us." It is also investing according to demand. The store sports for the first time in the world M&S's new-look lingerie and beauty department. Its store in New Delhi's South Extension is next in line for the refurbished look. This is because lingerie now accounts for over a fifth of the retailer's sales. M&S India sees 28 per cent growth in like to like sales, says Bolland.
The brand has come a long way since its entry, according to him. "Earlier we had smaller stores and were perceived as expensive but now our prices are in line with mid-market retailers," he says. About 64 per cent of M&S' apparels sold is sourced from India, Bangladesh and Sri Lanka, bringing down the prices. It has been able to sustain the 30 per cent cut in prices it had taken in 2005.
"If you go to M&S stores, latest waist-adjusting trousers are selling very well. Its pricing has seen customers not waiting for its sales season to kick in, something they do with other foreign apparel retailers.
Local sourcing has come in handy for them," says Prashant Agarwal, joint-managing director at Wazir Advisors, a management consultancy.
If international markets are being marked by soft consumer sentiments and a sombre retail mood, India is seeing a flurry of activity from apparel retailers, with even hypermarkets dedicating greater share to fashion to prop up margins. The fast fashion brand Zara, also in India through a JV (with the Tata) like M&S, has reportedly broken even within a couple of years of entry.
"For Reliance Retail, M&S brings in medium to premium bands in its folds. Otherwise, the JV partner had a mass market brand, Reliance Trends," Agarwal says.
According to Agarwal, M&S can be seen competing with brands such as Louise Philippe and Van Heusen but priced lower. Of the homegrown retail chains, Westside from Tata has a similar model of retailing private labels and not stocking other brands.
But Bolland says M&S won't focus on fast fashion: "We are focusing on style as well as quality that others are not focusing."
Agarwal says M&S is not competing with brands such as Zara and H&M as the former sells mostly formal wear while the latter focus on casual wear. According to Technopak Advisors, western wear accounts for $25 billion (Rs 1.57 lakh crore) which is 60 per cent of the total apparel market.
GROW IN SCALE
* M&S to open 44 new stores by 2016, making India the largest international market outside its home market, UK
* Refurbishes and debuts new looks of sections which have seen higher sales in India
* To have flagship stores in metros with smaller stores on their fringes
