Small Brands, Big Canvas
Driving a revival in the country’s apparel business after a tough year is a slew of regional brands mushrooming in smaller cities and towns across the country that are now attracting the attention of private equity players. Brands such as Liverpool Retail India’s Barcelona, Vir Retail’s John Hill and Nahar Group’s Cotton County that sell outfits at less than one-third the price of national brands are opening stores faster than the cautious national brands.
These brands operate in the Rs.150-600 price band, working on low margins and fast stock turnover.
Their marketing efforts are mostly localised and they woo new consumers into the organised sector through discounted offers like ‘buy one, get three’.
“National brands retail at a mark up of around three times, which is channelised into branding. We pass this on to the customer while retaining net margins of 8-10%,” says Kailash Gupta, MD of Ahmedabad-based Liverpool Retail India. While national players focus on per-store profitability and saturate metros before targeting tier II and tier III cities, these regional brands bet on scale and dress up smaller cities with Westernised brand names. More.
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