Mumbai: The retail arm of textile company S Kumars Nationwide Ltd, Brandhouse Retails Ltd, would launch a chain of stores selling private label clothes for men, women and children and home accessories. The company is in talks with foreign partners for the chain, which will open by March 2009.
“It will be a la Zara, that is the model,” said Nitin Kasliwal, managing director of S Kumars, referring to the Spanish apparel store chain. The chain will have 250 stores across 110 Indian cities over the next five years, and will sell casual, “value-for-money” clothes.
Multibrand approach: Brandhouse’s chief executive Tarun Joshi. The company, which will get demerged from S Kumars on 2 May, will invest around Rs500-600 crore for its expansion this year. (Photo: Ashesh Shah/Mint)
Earlier, Brandhouse had announced that it would launch a multibrand factory outlet store chain, which would open by December. The chain would grow to 175 stores over the next five years. The group’s exclusive brand outlets would also grow to 1,200 from the current 398 stores over the next three years.
Brandhouse, which will get demerged from S Kumars on 2 May, will invest around Rs500-600 crore for its expansion this year. This will be raised through a possible initial public offering, private equity placements, internal accruals and debt, Kasliwal said.
Brandhouse’s listing could probably come in July or August, he said.
India’s clothing and textile segment is expected to grow at 23.3% till March 2011, according to a report by Man Financial Sify Securities Ltd, a Mumbai-based brokerage. The penetration of organized retail in clothing is expected to nearly double to 35% by 2011 from 18.4% in 2006, the report says. This growing market and the government’s policy allowing single brand retailers to own majority stake in their Indian operations has meant that international clothe brands such as French Connection, Miss Sixty and Tommy Hilfiger have entered the Indian market. Private label stores such as Koutons have also set up more than 1,000 stores within a couple of years.
S Kumars is a textile manufacturer and owns menswear brands including Reid and Taylor, S Kumars and Tamarind. It has also the Indian partner of international luxury brands such as Dunhill and Escada and would look to bring several more luxury brands this year.
Brandhouse would sell 30-40 different brands, including domestic and international brands through its multibrand factory outlets. “The growth of apparel brands has created the need for factory outlets,” Tarun Joshi, Brandhouse’s chief executive, said. “It helps youth enter a brand.”
For its value-for-money private label, Brandhouse has hired an expatriate chief executive. It is in the process of building design, manufacturing, logistics and marketing teams. “The biggest challenge is to crunch the cycle between production and retail as much as possible,” Joshi said. “We have to balance the production and retail side and not skew on either side.”
Joshi said that finding reasonable real estate was also among the biggest challenges in starting up the stores. While the multibrand stores would be at edge-of-town locations, the value-for-money stores would be in city centres.