BackLacoste plans to expand to non-metros
Lacoste is evaluating setting up businesses in non-metros such as Indore, Cochin and Vadodara to strengthen the brand's presence
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New Delhi:
French clothing and accessories brand Lacoste is exploring its next phase of growth in India.
Launched in 1993 in India, the company currently operates 48 stores in metros and select non-metro cities. It is now evaluating setting up businesses in cities such as Indore, Cochin and Vadodara to strengthen its presence in the country.
“Our focus has always been metro and select non-metros but now we are open to expanding in tier-I cities," said Rajesh Jain, managing director and chief executive officer (CEO) of Sports and Leisure Apparel Ltd, which has exclusive rights to manufacture and market Lacoste products in India.
Lacoste sells apparels, shoes, bags, belts and sunglasses for men, women and children and is popular for its polo T-shirts in solid colours.
The company has been testing the waters in cities like Jaipur, Pune, Chandigarh, Jalandhar and Amritsar since late 2014. The decision to expand further in such cities, Jain said, is led by consumer demand.
“There is demand coming from tier-I cities. We opened in certain cities and that has delivered us very good business," he said.
Jain added that the company is completely focused on maintaining its premium image. “We don’t want to dilute the premiumness of the brand in India," he said.
The company has also altered its ownership strategy for expansion. All new stores will be 100% franchised. For metros, Lacoste will continue to run company-owned stand-alone stores in high-street shopping areas and in shopping malls.
The move comes after the company encountered a slowdown in its growth for almost two years. “Till about two years ago, we were growing at around 28% compounded annual growth rate (CAGR). We had to slow down our expansion to rethink our strategies. In 2015-16, we closed at a decent double-digit rate," Jain said, refusing to divulge the revenue details.
The company is targeting a CAGR of 15%-20% for the financial year 2016-17 and plans to open seven to eight points of sale, including its online ventures.
In June, Lacoste launched its own online portal to further its reach across the country. The company is also in talks with certain online marketplaces to widen its footprint. However, Jain refused to disclose any details. “We will go for the marketplaces which will provide us with a premium environment," he said.
According to a report by retail consulting firm Technopak, men’s casual wear market in India is expected to touch ₹ 68,450 crore by 2019 from ₹ 41,500 crore in 2014, while women’s casual wear market is estimated at ₹ 8,894 crore in 2019 from ₹ 4,350 crore in 2014.
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