Amid a crime saga, Lux Cozy sees sales drop4 min read . Updated: 03 Nov 2007, 05:40 PM IST
Amid a crime saga, Lux Cozy sees sales drop
Amid a crime saga, Lux Cozy sees sales drop
Kolkata: Lux Cozy underwear is in a bit of a sticky situation.
Dealers here say they are seeing significant drop in sales of the brand stemming from the fallout of negative publicity associated with its manufacturer Ashok Todi, who has come under scrutiny following the death of his son-in-law Rizwanur Rahman.
Todi, who is a Hindu, had vehemently opposed his daughter Priyanka’s marriage to Rahman, a Muslim computer graphics teacher from a more modest economic strata. An investigation is on to ascertain if Rahman’s death was a suicide or if he was killed.
Rahman’s body was found on rail tracks on 21 September, after which news of his harassment by the Todi family and associates emerged in the media. Todi has denied any involvement in the death of Rahman and he has not been charged with any crime.
In interviews, several hosiery wholesalers in the city’s Burrabazar area, where Todi’s company is headquartered in a modest three-storeyed house on Kali Krishna Tagore Street, say the Lux Cozy brand has taken a big hit ever since the controversy first erupted in late September.
“This is the festive season, with Durga Puja and Id, followed by Diwali and Bhai Phota (a Bengali festival)," said Radheyshyam Sahu, partner at SK Trading, a hosiery wholesaler. “Normally the bulk of sales happens now and if it doesn’t, the company is in for a bad time." Last October, Sahu’s had sold approximately Rs35,000 worth of Lux Cozy merchandise every day. “This year, it has come down to Rs15,000-17,000," he added.
Added Indradeb Saha of Lakshmi Stores: “I used to sell 500 boxes of assorted Lux Cozy wear before this scandal, but now I manage just 200-250, or even less. People are just not touching his (Todi’s) stuff."
There is no scientific way of ascertaining if this anecdotal drop in sales is widespread in Kolkata and elsewhere in the state. A senior marketing manager at Lux Hosiery Industries Ltd, the company that sells briefs, vests, socks and shorts under the Lux Cozy brand, insisted that this season the firm has seen sales rise 20%.
The firm’s chief financial officer said revenue for the past month was Rs25 crore, marking a 19% rise over year-ago October. He couldn’t give a break-up of how much of that sales came from West Bengal, where Rahman’s death has dominated newspaper and television headlines.
Both executives didn’t want to be named.
The brand is in no way related to Hindustan Unilever Ltd’s popular soap brand Lux.
Manoj Lunia, executive director of Lookad (India) Ltd, the ad agency handling Lux Cozy’s campaign in West Bengal, said Bihar, Uttar Pradesh, Chhattisgarh, Gujarat, Rajasthan and Punjab are big markets for the brand. He acknowledges that some “incident" influenced the purchase behaviour. “This has happened to Pepsi and Coca-Cola" too during reports on pesticide content in their soft drinks.
Indeed, while “city-based purchasers have been a little sluggish...those that come in from the districts, the North-East and Bihar-Jharkhand, more than make up for this", said B.P. Trivedi of Kali Shahai Anandi Prasad Trivedi in Entally Market. In Trivedi’s case, October sales are about 10-12% higher than last year, although he said the firm doesn’t keep accurate records on year-on-year sales by brands.
Meanwhile, some shopkeepers say rival brands, such as Rupa, Amul, Raju and P3, have picked up market share.
“Overall sales have not decreased and the customers have merely shifted loyalty to these brands," said Bapi Haldar, a salesman at Naskar Stores in New Market. “These brands have gained by almost 3-5%," he claimed. Sales might also be hurting from what appears to be a surprising lull in Lux Cozy advertising in October, typically the month with the highest sales for the brand.
While Bollywood actor Sunny Deol is still Lux Cozy’s national brand ambassador, the brand has not been overly visible this festival season. The company’s campaign for “generation next" was banned by the Union ministry of information and broadcasting after complaints of it being obscene. Lux Cozy then reverted to a previous campaign, but that, too, has been pulled off the air since 30 September.
“We still have the outdoor campaigns on," said the Lux Hosiery executive.
Lookad’s Lunia said this is the time of the year when the company launches its campaign for winter garments (read thermal wear). But that ad is not yet ready, he added.
Meanwhile, in West Bengal, the company has already lost its brand ambassador, local matinee idol Prosenjit.
The actor has declared that he is not interested in continuing as brand ambassador and will not renew his contract with the brand, which ended this month. However, the marketing manager at Lux Hosiery said the company is yet to hear from Prosenjit.
Lux Hosiery, which is listed on the Calcutta and Ahmedabad stock exchanges, reported a profit after tax of Rs2 crore on revenues of Rs165 crore in the year ended March. In the first six months of this fiscal year, Lux Hosiery posted sales of Rs90 crore. The company is targeting Rs225 crore in revenue for the full year, said Lux Hosiery’s CFO.