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Arvind rebuilding as a lifestyle brand: Kulin Lalbhai

3 min read . Updated: 11 Jun 2013, 12:44 AM IST Krishna Merchant, Shruti Narayan

Arvind Ltd’s executive director Kulin Lalbhai. Photo: S. Kumar/Mint (S. Kumar/Mint) — Arvind Ltd’s executive director Kulin Lalbhai. Photo: S. Kumar/Mint (S. Kumar/Mint)

The executive director of Arvind Ltd talks about firm’s revenue target and premium fabric market

Mumbai: Arvind Ltd , a maker of textiles and apparel, wants to grow sales of its eponymous denim fabric brand from ₹ 500 crore to ₹ 2,000 crore in five years. Executive director Kulin Lalbhai explained in an interview on Friday on the sidelines of an event on how he hopes to achieve this target in a company that had consolidated net sales of ₹ 5,359.22 crore in FY13, grow the premium fabric market with its new brand Tresca , enter the digital space and implement sustainable growth practices. Edited excerpts:

What’s the strategy behind introducing Tresca?

Until now, we’ve been working more on mid-market products within the brand. But with disposable incomes increasing, people want to buy more premium products, have a better lifestyle, and that’s the Tresca opportunity. That is why we are rebuilding the Arvind Store as a lifestyle brand, and positioning Tresca on that pillar. By bringing in Italian designers and putting it in modern retail formats such as the best multi-brand outlets in the country, we’re speaking to the discerning customer.

Are you switching focus from your current consumer base?

It’s not like we are losing focus on the mid-market. It’s that the premium market is now a very big opportunity and we want to leverage the strength of the brand Arvind to talk to that market.

How is the slowdown affecting your focus in smaller towns and cities?

In a slowdown, we need to figure out profitability versus growth, and find a way to achieve both. Even in a slowing market, we have been growing aggressively thanks to textile, for which there is huge demand. We are very bullish on the frontiers of retail in these areas where preferences are evolving rapidly.

The opportunity to grow is huge, with revenues in tier III, IV and V towns matching up with the high street stores in metros. So even with small consumption bases, the potential is enormous. We are looking at a canvas of 600-700 cities in India for growth, which is very different from the canvas available to an international brand.

Are the dynamics of the textile industry changing?

The world order of textile is changing and the market is moving towards India. We have been clocking over 12% growth, far higher than the sector average. Organized retail as a percentage of total retail is also growing very well. We have been growing at 30-35% in a tough economy. The next 10 years will be the most exciting years of textile in India, with huge opportunities to grow where China is losing. Arvind is excited to position itself to manage that opportunity as the market leaders in India.

What is your strategy for your businesses outside textiles, where your company’s growth is slowing?

Whether it is our telecom, engineering or real estate businesses (accounting for 4.5% of the company’s overall sales in the year ended 31 March), there is no concern on profitability. On scale, they are smaller businesses, but in the portfolio of a conglomerate, you need to balance large established businesses and new opportunities. In certain business, you want a niche position and, in others, you may want to grow exponentially.

What kind of new projects are you looking at?

E-commerce is a quickly evolving opportunity in India and Arvind needs to position itself to take advantage of it. Any retail business today needs to think of offline and online spaces in a holistic manner because that is the future. We will be working to ensure a seamless strategy incorporating the digital and physical experience for all our brands.

What are some of the aspects of a family business (started in 1931 by the Lalbhai brothers and now run by Sanjay Lalbhai and his sons Punit and Kulin) that you think make it different from a professionally run business?

Family-run businesses are often equated with a very old school construct, while today it is very different and companies need to reinvent themselves for the future to remain relevant. It is important to leverage the strengths of family ownership which gives you the ability to think long-term and the merits of having a fully professional setup and meritocracy. You have to balance the two. We are developing a strategy cell within the group to help our overall vision, attracting some of the best minds from leading consulting firms such as Amar Choudhary , who has joined us as head of corporate strategy from the Boston Consulting Group.

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