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Home / Industry / Retail /  Arvind Sports eyes 25% revenues from Arrow and US Polo in next 3-5 years

Mumbai: Arvind Sports Lifestyle Ltd, a venture from the Lalbhai group of companies set up a year ago to grow its presence in the $7 billion footwear market, is looking at its largest brands to help bag a fourth of their revenues from sports lifestyle and footwear in the next 3-5 years.

US Polo and Arrow are the largest brands in the group’s portfolio—with revenues of nearly 1,000 crore—which diversified into footwear last year. “In the next 3-5 years brands like US Polo and Arrow can get 25% of their revenues from sports lifestyle," said Rajiv Mehta, chief executive officer, Arvind Sports Lifestyle who joined the company after a nine-year stint at Puma where he established the brand in India and grew its footprint to over 300 stores across the country.

The new unit has also tied-up with international brands, US-based Cole Haan and Singapore-based women’s footwear brand Heatwave.

Cole Haan which opened its first two stores in Delhi and Bengaluru in the last one month will have 3-5 stores in the next one year, said Mehta. Its shoes are priced in the range of 7,000 to 25,000 a pair.

Cole Haan is positioned in the affordable luxury space in India and globally, said Gregory Dinges, president, Asia-Pacific, Cole Haan. The pricing in India will be the lowest in Asia, he said, adding that the country has the potential to become one of its largest markets.

Heatwave will open its first store in August and its products will start at 4,000.

India’s footwear market is estimated to be worth $7 billion including both organised and unorganised sectors. The bulk—85-90%—of the market is dominated by the unorganised sector, said Mehta. About 10% is split between six brands—sportswear majors Nike, Adidas, Puma and Reebok and general footwear sellers Clarks and Bata. The other footwear brands in the market are really small, said Mehta while explaining that there is a lot of scope to grow the market.

As such, India’s personal consumption expenditure (PCE) per capita is just $1,012, or a third of China’s and the spending is focused on basics—27% of PCE goes on fresh food. PCE on clothes and footwear (ex-sportswear) gets just 5.9% of the consumer’s total spend, according to a June report by Goldman Sachs which notes that affordability remains a key issue.

However, the Indian consumer is brand conscious and brand investing will be a big theme in everything as the urban mass trades up, said the Goldman Sachs report. However, companies need to be careful as consumers will trade up into brands that offer the most incremental value, but may not readily jump to aspirational brands. This is already seen in categories like automobiles where the consumer’s first criterion while buying a car is the brand’s reputation for fuel efficiency.

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