<p>You have had the comfort of wearing Allen Solly, Louis Philippe, Peter England apparels. Now get ready for footwears or even laptop bags of the same brands. Aditya Birla Group’s Madura Fashion & Lifestyle is betting big on such brand extensions to drive home more margins and capture a higher share of shoppers’ wallet.
Last week, premium casual wear brand Allen Solly said it was entering the footwear segment. The week before, super-premium brand Louise Philippe launched office and laptop bags, while mid-priced brand Peter England launched luggage products sometime back.
In fact, Louis Philippe was the first brand to diversify from apparel and offer footwear as well as accessories. The brand launched its only footwear store in Pune six months ago and plans to open 20 more stores in three to four years.
Margins in accessories are a big draw: 50 per cent as against 20-25 per cent in apparel. If sourcing is right, then margins can be as high as 80 per cent. In case of bags, it is around 40-45 per cent.
Currently, the contribution from non-apparel is around 4-5 per cent and is expected to touch 10 per cent in three to four years. Madura’s top line was Rs 1171 crore in the first half of FY 2013.
“As our brands evolve from offering products to providing complete lifestyle solutions, we are expanding our portfolio to include lifestyle accessories. It enhances and completes the consumer experience at our retail stores,” says Ashish Dikshit, CEO Madura Fashion & Lifestyle, adding these products have played a role in enhancing the productivity (sales per square feet) of the company’s stores, Dikshit adds.
“The plan fits in well with Madura’s expansion plans,” says Prashant Agarwal, joint managing director of Wazir Advisors.
“This way, they are looking at capturing a larger share of the consumers’ wallet. This is not a short-term game. It will certainly work in future and help win consumer’s trust,” says Arvind Singhal, chairman of Technopak Advisors.
Madura in fact joins a growing list of big brands diversifying into accessories and footwear. Samsonite, which is essentially into bags, has entered the footwear category, while Lavie, which sells women’s handbags, have also started doing the same. These brands will face competition from other retail departmental stores as they house everything under one roof in the fashion segment, adds Agarwal.
The Indian footwear industry is currently at Rs 30,000 crore and is expected to grow at a compounded annual growth rate of 12 per cent per annum. In value terms, casual footwear segment accounts for almost 65 per cent of the total market, followed by formal footwear at 15 per cent.
Men’s footwear contributes about 60 per cent of the total market and 84 per cent of the organised retail market. In women’s footwear category, casual footwear is the biggest segment and is sold majorly through traditional retail channels, according to Technopak Advisors.
The Indian women handbag market was close to Rs 2,250 crore in 2011. Out of all the categories, casual ladies handbags form the highest share in the total market at 56 per cent, followed by office bags at 27 per cent of the total share, according to Technopak.
Allen Solly is not looking at a significant contribution from these categories in this fiscal, but expects to ramp it up gradually. On the other hand, Louis Philippe wants these categories to account for 5 per cent of its total turnover of more than Rs 1,000 crore this year.
“Brands need to convince the market. Bags are closely related to apparels, hence we have included bags in our stores to enhance the look of the apparel,”says Kedar Apshankar, chief operating officer of Peter England.
After bags, Louis Philippe plans to enter the heavy luggage segment to make it a one-stop shop for accessories. Louis Philippe was the first brand under the Madura umbrella which took the leap and started with footwear.
“Our customers started asking us when we would start selling footwear . We thought over it and decided to take the plunge,” says Jacob John, brand head of Louis Philippe.
Marketing for these categories is an integral part in increasing customer awareness about these categories and Madura is going all out with advertising on the social networking site, Facebook, to promote non-apparel categories.