Bangalore: Premium apparel brands are revising their pricing, positioning and production strategies to ensure more sales, even if it means selling at lower prices that don’t quite belong on a high-end tag.
Brands such as Scullers, Allen Solly and Marks and Spencer Group Plc. (M&S) have slashed prices by 10-20%, while Turtle India Ltd, Provogue India Ltd and Van Heusen are focusing on more volumes at lower price points.
Affordable buy: Many retailers in the country have stalled expansion plans, and are focusing on repricing and introducing product lines at lower prices, as a result of the downturn in the past 8-10 months. Hemant Mishra / Mint
For the summer, UK’s M&S cut prices by 12% overall, including a 20% reduction in menswear, to reposition itself from a premium to a mid-market brand in India. It now sells basic polo shirts for men at entry prices of Rs395 and designer polo shirts for between Rs895 and Rs1,295.
“We are a mid-market brand in the UK, but were perceived here in India as a premium brand,” said Mark Ashman, chief executive of Marks and Spencer Reliance India Pvt. Ltd, the joint venture between M&S and Reliance Retail Ltd. “Our pricing strategy is now aimed at ensuring a consistent positioning here in India also as a mid-market brand.”
The retail segment in India has been substantially hit by the downturn in the past 8-10 months, and many retailers have stalled expansion plans, and are focusing on repricing and introducing product lines at lower prices.
Allen Solly was among the earliest to start toying with its prices and lines. From the start of the year, the brand, while retaining its premium wear at Rs1,300-1,500, has played around with a new casual line at an entry price of Rs399 for T-shirts and Rs1,100 for jeans.
Its casual wear line, which occupied 10-15% of its stock earlier, has been expanded to 45-50%.
“This price revision has been a volume driver. Our sales volume has gone up by 20% store-to-store since the correction,” said R. Satyajit, chief operating officer of Allen Solly, part of Madura Garments.
Kolkata-based men’s brand Turtle, too, has started positioning more shirts at Rs799 rather than at Rs899-999. About 50% of its stock now falls in the Rs799 range, up from 30% earlier.
“Our turnover may be hit by 2-3%, but we want to sell more at the first price formula and not depend on customers to come in only during discount sales,” said Amit Ladsaria, CEO of Turtle, in which Future Venture India Ltd, the venture capital division of the Future Group, picked up a minority stake in June.
Retail analysts say premium brands had to correct their pricing and positioning.
“There’s no point in multiple discount sales a year and it dilutes a brand’s positioning,” said Bappaditya Basu, vice-president (retail) at consultancy Jones Lang La Salle Meghraj. Most retailers have also realized the focus of value retailing or providing more value to even a premium brand, he added.
“The idea is to do more volumes at slightly lower margins for retailers now,” said Ameet Panchal, CEO of Provogue. Provogue is also working on correcting prices and fixing its price-volume index, Panchal said, but didn’t give details.
Fixing the price-volume index refers to producing fewer high-priced clothes and more at entry price levels to ensure more sales.
Scullers, for instance, has shrunk the volume of its Rs1,499-1,699 premium wear range from 30% to 10%. The focus now is on the Rs899-1,099 bracket, which will comprise 55% of the entire stock. Some of the clothes it had earlier priced at Rs899 are now selling at Rs799.
“The downturn resulted in a lot of stock piling up and we need to sell that at a better price. Unless we drop prices, it will be difficult to sell the new lines as well,” said Asha Shridhar, brand manager at Scullers, the retail brand of Indus-League Clothing Ltd, part of the Future Group.
Competition among brands is fierce and even a discount of Rs100 for a shirt makes a difference to the buyer, said Ladsaria of Turtle.
Arrow, a retail brand from Arvind Ltd, is launching a new range of wrinkle-free shirts in September at Rs1,299, to compete with Louis Philippe’s and Van Heusen’s wrinkle-free shirts that are priced at about Rs2,000.
J. Suresh, CEO of Arvind’s brands and retail divisions, said that unlike other brands with single lines, 50% of Arrow shirts would be from the wrinkle-free line.