Bangalore: On a recent evening, Usha T., a middle-aged housewife, breezes into a new made-to-order menswear store in Hyderabad. In two minutes, she has bought two T-shirts and a formal shirt for her husband who wears an in-between size. “This place is good… At least someone realized that not everyone fits into in the regular sizes available all over,” Usha says.
Usha, or rather, her husband, is the ideal target audience for Zerostock Retail Pvt. Ltd, a Hyderabad-based company that runs the Cornerstone chain of stores—20 of them across seven cities currently. The company is looking to increase this number to 300 by 2009.
True to its name, Zerostock carries no stock at its stores. Customers choose the cloth from a set fabric samples, as also the style and the cut. The finished garment is delivered in 24-48 hours, says Ashok Mayya, Zerostock’s chief executive. And customers can shop online too.
Zerostock is convinced it is tapping the sweet spot in the apparel business.
Menswear accounts for 45% of India’s Rs89,000 crore garment industry, Mayya says, and this is a share that is held back by limited designs, sizes and stocks.
Cornerstone, which is laying claim to being the first customized apparel brand in the country, offers shirts with neck sizes between 36cm and 46cm and trousers with waist sizes between 28 inches and 48 inches.
Most other brands, the company claims, offer just four sizes in shirts—39, 40, 42 and 44. Zerostock prices formal shirts at between Rs899 and Rs3,999, casual shirts between Rs999 and Rs1,499, and trousers at between Rs1,249 and Rs1,449.
Mayya says these prices are 30% less than that of brands such as Aditya Birla Nuvo Ltd’s Van Heusen, Arvind Brands Ltd’s Arrow, and Zodiac Clothing Co. Ltd’s Zodiac, which Cornerstone plans to take on. Cost benefits—saving on rentals for smaller (between 600 sq. ft and 800 sq. ft) showrooms, fabric ordered in bulk and low inventory costs—help.
“It’s a huge market and we already have a large number of players, so entry of one more player does not make a difference to us. As long as a company is able to deliver what it promised to its customers in terms of quality and value for money, it will survive,” says Ashish Dixit, president, Madura Garments, a division of Aditya Birla Nuvo.
Zerostock has elements of scale built into its business model as well with a team of in-house designers providing design and fashion inputs.
Still, an expert said the Zerostock business model is new in India and untested. Its success will depend on the value in terms of quality and price it offers customers as also making deliveries within a day or two.
“When (Indians) buy a brand, it’s a ‘wow’ factor associated with it that matters to them. A brand is something they can flaunt. What is Cornerstone providing?...Where Cornerstone can compensate is the quality of product, which again is a huge call,” says Zahir Abbas, associate director, retail, KSA Technopak, a management consulting firm.
“It would be a difficult battle for Cornerstone to get people to spend money on something they can get from a local tailor at lesser prices or more conveniently from a mall,” he adds.
Mayya is certain the model will work and is looking to expanding the company’s offerings to footwear, jeans, sweaters, and accessories such as ties, socks and belts. The company was founded by Madhukar Gangadi, chief executive of MedPlus Health Services Pvt. Ltd, which runs a chain of medical stores.
Mayya says the company expects revenues of between Rs30 crore and Rs40 crore in fiscal 2009.
Zerostock has exhausted some Rs15 crore raised from unnamed angel investors, Mayya says, adding that it is looking to raise another Rs50 crore from venture capital and private equity firms.