The company has noticed that the smaller towns are showing much more resilience and the consumption impact as a result of covid-19 is much lesser in smaller town India
New Delhi: Homegrown fashion apparel and accessories firm Indian Terrain Fashions Ltd. said it is in the process of expanding its retail footprint with the launch of 20 new retail stores in tier-2 and tier-3 cities and towns. The company, which has completed two decades of operations, has opened stores in Hubli, Lucknow, Siwan, Ooty, Ganganagar and Srinagar among others.
The smart-casual clothing brand, which offers a range of casual and sportswear for men and boys, is expanding at a time when retailers are reeling under losses due to lockdown and dip in consumer demand.
Charath Narsimhan, managing director, said the company has noticed that the smaller towns are showing much more resilience and the consumption impact as a result of covid-19 is much lesser in smaller town India.
"This expansion strategy was always part of the long-term plan however has been expedited under the present situation," he said.
With a turnover of ₹900 crore, Indian Terrain operates over 1,500 stores across formats such as exclusive brand outlets (EBOs), multi-brand outlets (MBOs) and large format stores.
"We are operating 65 stores in malls across India and are in discussions on renegotiating rents with most mall managements who have been supportive of the challenges faced by retailers during this period. However, we haven’t closed any of our malls stores till now," Narsimhan added.
While the f footfalls in stores have been much less, the company claims to have seen a reasonable demand and conversions in the recent past with the unlocking of the economy.
Consumers are looking to buy comfort wear such as t-shirts, shorts, joggers and ringer t-shirts from the product line. Owing to online education classes being conducted via Zoom and Microsoft Teams, most parents prefer their children to look presentable and this has led to a spike in the kidswear category sales.
However, covid-19 induced challenges plague the company as well which is being mitigated by focusing on the direct to consumer channels and e-commerce platforms. The brand has launched a “Store to Door" service whereby a curated virtual catalogue is sent to the customer via WhatsApp and product is delivered at the customer’s doorstep.
The company is focusing more on online selling, having strengthened its e-commerce partnerships with Flipkart, Myntra and Nykaa. It has also revamped its own e-commerce website.
"Our overall online sales are ahead of the pre-pandemic levels. Currently, our contribution of online sales is between 10-12% and we are targeting this to reach 25% in the next 3 years," Narsimhan said.
Fashion retailers continue to face inventory and working capital related challenges as discretionary consumer spending declines, said Ankur Bisen, senior vice president, retail and consumer, at Technopak, a management consulting firm.
"Small towns, where there are no strict lockdowns, have more easy access to markets, therefore opening stores there seems right. Brands are increasingly looking to reposition and offer relevant products such as comfort and inner wear to consumers. The objective is to find ways to tide over the Corona crisis until we have a vaccine and markets stabilise," he added.