WannaBe:
Raymond's ready-to-wear designer wear has churned up some learnings
| Since January 2004, these mailers have been sent to 200-odd existing customers of Be:, the designer-wear store owned by the Rs 1,500-crore Raymond group. |
| So far, Be: has barely got its toes wet in the customer mentoring exercise; each session accommodates only 10 invitees. But, even with just three sessions each in Delhi and Mumbai, the company claims conversion rates of 25 to 40 per cent per session. That's pretty decent for a retail chain that's less than three years old, has 11 stores in nine cities and clocked in a turnover of Rs 7 crore last year. |
| But when Be: was launched in July 2001, it was poised for bigger things. The store was probably the first of its kind in the country: Raymond had roped in six or seven designers to retail their prêt (short for prêt-a-porter, or ready-to-wear) labels through Be:. It's not as if designers had never joined hands to market their labels earlier, but that was largely for couture (designer, made to order). Be:'s USP, then, was its emphasis on prêt, which appeared to make sense, given the boom in Indian designer wear. |
| Indeed, the Raymond group was banking on that. It announced that in about three years (that is, by 2004), Be: would be a 100-store nation-wide chain. The initial plan was to increase presence in Mumbai and Delhi with two outlets in each city by November 2001; over the next 18 months, the store would go national with 50 outlets, which would increase to 100 the following year. |
| Retailers say that a designer-wear store should earn between Rs 50 and Rs 100 per sq ft, depending on where it is located. Based on that, the average annual sales per Be: outlet should have been Rs 2.5 crore to Rs 4 crore, and Be: should have been looking at a turnover of anywhere between Rs 250 crore and Rs 400 crore in three years' time: the current turnover, at Rs 7 crore, is a tiny fraction of that. |
| Clearly, Be: has grown far slower than it had targeted. But is that evidence enough to classify Raymond's maiden venture into women's-wear a failure? Surprisingly, industry observers say no. Explains a fashion designer who has been associated with Be:, "It's a brilliant business model and only a big corporate can make it work. But designer wear is not an easy business: new concepts or ideas like Be: take time to click." |
| Nods Harminder Sahani, principal and associate director of retail consultancy KSA Technopak, "Be: is a unique concept altogether. Not many fashion houses or companies have managed to go for different formats like these." |
| But then, different formats often bring in a different set of problems. For one, managing several designers under one brand umbrella can be quite a task. Each designer brings not only his own style but also his own size estimates. |
| A lack of standardisation in sizes can lead to some fraught moments in a clothes store, especially since the company claims that the idea behind Be: is to maintain a uniform brand experience: the emphasis has to be on creating the store as a brand, and not just a shop-in-shop option for designer-wear. |
| In other words, customers need to build associations with the store and not the labels available there. Anirudha Deshmukh, vice president, retail operation, Raymond, agrees that sizing is a key concern, but admits that "We haven't been able to solve it yet." |
| Industry watchers say standardisation is possible only if the manufacturing is centralised or, better still, done in-house. So far, Be: has only bought finished garments from designers. "Since some of the designers export their garments, they have their own manufacturing units and are well-organised with respect to infrastructure. So we didn't sense the need [to manufacture in-house] so far," says Deshmukh. That is now set to change. By March 2005, Raymond plans to set up two garment manufacturing units in Mumbai. |
| Centralised manufacturing is likely to sew up another benefit as well: price. Industry sources believe that if Be: sets up its own garment production unit, costs are likely to go down by 10 to 15 per cent, which can translate into lower price points for the customer. |
| And that's critical in this line of business. Unlike couture, affordability drives prêt. And designers are realising the need to make prêt more wallet-friendly. Compared with three or four years, prices in the industry have already come down by more than 20 per cent. Even at Be:, the company has stuck to the price range of Rs 600 to Rs 6,000 since its launch. But that's still too high, say industry observers. |
| "Upwards of Rs 4,000 for prêt is anything but affordable. If Be: is supposed to take designer wear to the masses, the higher prices could be an inhibitor for the growth," points out a designer. But Be: is yet to be convinced that pricing is a problem. "There are buyers for our price range. However, we do take care not to exceed that," says Deshmukh. |
| But that doesn't save Be: from the threat of competition from individual designer's prêt lines. The selling point for Be: has always been the greater prêt variety it can offer, all under one roof. Till now, this format didn't have direct competition "" high-end multi-designer-wear boutiques such as Melange, Kimaya, Ogaan and Ensemble are mainly for couture, not prêt. And while apparel companies like Madura Garments and Provogue have a presence in the ready-to-wear segment for women, they do not offer designer wear like Be:. |
| But now, other multi-designer prêt stores have come up "" Isis in Bangalore, Shlok in Mumbai, Elah in Hyderabad and Little India in Kolkata, to name just a few. Then, most designers have launched their own prêt lines: Label by Ritu Kumar, Balance by Rohit Bal, Que by Rohit Gandhi and Studio Valaya by JJ Valaya, to name just a few. And designers like Anita Dongre and Rohit Bal have not only opened their own exclusive stores, but are also tapping the shop-in-shop option at departmental stores. |
| Dongre, for example, retails her prêt label AND at six exclusive stores in the metros. That apart, AND also retails at Pantaloons and Shoppers' Stop, which have a combined presence of close to 20 locations. "The growth and expansion of departmental stores has translated into reach and visibility for my fashion label," says Dongre. Proof? A good 50 per cent of her sales come from departmental stores. And AND is a Rs 7-crore brand "" as big, in fact, as Be:. |
| Could Be:'s problem, then, be a misreading of the market? Probably, agrees the owner of a large-format boutique in Mumbai. "The company over-estimated the growth of designer wear, especially prêt, at the time of launch. So the targets announced were over-ambitious," she says. But that doesn't explain the success of labels such as AND. The trick, explain industry watchers, is to not bank on prêt wear alone. |
| Most designers who retail at more than one location offer a mix of couture and prêt lines. "Customers still don't mind paying a premium for couture, which can be worn only on special occasions. But designer prêt is seen as too expensive for frequent wear," points out a Mumbai-based designer. |
| And high-end pricing may hinder the prospects of a designer prêt brand beyond the metros. Be:'s initial target of 100 stores within three years was based on the assumption that the brand would find favour in smaller cities. "We over-estimated the growth of prêt in general," agrees Deshmukh. |
| Consultants point out that in the initial expansion phase, the store should have focused on locations that were sure to yield high turn of stock. For instance, a 1,200 to 1,500 sq ft store on a high street (such as Kemp's Corner in Mumbai and Ansal Plaza in Delhi) would yield a stock turnover of at least 10 or 11 in a metro. But Be: found its way into markets such as Delhi's Karol Bagh, which didn't really fit the store's profile. That outlet was soon relocated to Greater Kailash after Raymond realised that "the merchandise didn't go well with that locality," says Deshmukh. |
| Now, instead of a rapid-fire expansion into different cities, the plan has become more focused. "We will be concentrating on the bigger metros and locations with a higher stock turn," affirms Deshmukh. The next one year will see near to 10 more Be: stores opening, first in Mumbai and Delhi and then in Bangalore and Kolkata. This will also mean minimal difference in the merchandise mix at every store because there's little difference in customer preferences across metros. |
| With a new strategy in tow, Be: is expected to rake in a turnover of Rs 15 crore by the end of this fiscal. Will Be: size up to the new target? |