The government recently released a discussion paper on permitting foreign direct investment (FDI) in multi-brand retail chains like those run by Wal-Mart and Carrefour around the world. Amit Ladsaria, director of Kolkata-based Turtle Ltd, a manufacturer and marketer of branded apparel, spoke to Swati Garg on this issue as well as about growth and sustainability for smaller apparel players in an increasingly globalised market. Excerpts:
Where does Turtle, as a brand, position itself?
As a brand we stand somewhere between Peter England and Park Avenue — Turtle apparel is priced between '800 and '1,200. We target the upwardly-mobile urban Indian, in metros as well the as the Tier-II cities.
The government is proposing foreign direct investment (FDI) in multi-brand retail. How would this affect you?
FDI in retail till now has been restricted to single-brand phenomena. Despite this, we have seen increasing competition from the larger global players in the last five years. Zaara, for example opened shop in New Delhi recently. Besides, brands such as Bossini, United Colors of Benetton and others have been operational through Indian stores for a while.
We firmly believe that investment from more up-market players in the multi-brand retail sector would aid demand growth and create a healthier playing field, which would benefit the smaller players as well.
What problems is the apparel sector facing at present?
The problems we face as a company operating within the apparel retail sector are largely internal, given the fact that in terms of retail most of what we know we have learnt on the job. The problem was that we were largely a wholesale business until we ventured into multi-brand retailing and are, therefore, still learning the ropes.
Beside this, as an industry the biggest issue is the rising cotton yarn prices. These have seen an increase of 25-30 per cent over the past six months, and are applicable to all cotton fibres, including denim. The phenomenon of cotton yarn price rise is global, but hits smaller players like us the hardest because the cost of production goes up tremendously.
How has the past year been for you?
The year has yielded decent growth figures. Profits have grown 30-35 per cent quarter on quarter as compared with 2009. Overall, our annual turnover reached '65 crore, which I think was a decent figure, especially since we were coming out of a recession.
How many stores do you have right now and what are your expansion plans?
At present, we have 75 stores in India, and we aim at opening two stores a month from here on in the next year, taking our target to 100 stores by the end of 2010. In terms of turnover we aim to touch '100 crore.
