Apparel retail chain Provogue’s latest print advertisement says, “You’ve changed. We’ve changed”. Indeed, it has. From glitzy advertisements that featured Bollywood stars Saif Ali Khan, Fardeen Khan and Hritik Roshan, the latest advertisement uses models to promote its new collection.
But it’s not just the advertisement content that has changed. The 12-year old company is changing the look and feel of its stores by changing the colour from ‘white and red’ to a more contemporary black. It is also launching new consumer products and new fabrics to win back customers who are spoilt for choice, in terms of global and domestic brands.
The retail chain has gone through some tough times in the past few years. In the early 2000s, it became famous with its ‘polisenic’ fabric (a soft fabric). After that, while it concentrated on heritage stores, many of its peers marched ahead with a bouquet of brands and product innovations. Industry players and consultants say that the company was unable to cash in on the early advantage due to faster growth amid competitors.
For instance, Indus League, set up in 1999 by eight ex-Madura Garments executives with just two brands, has grown its product portfolio to nine, including Indigo Nation, John Millers and Scullers. The Future-Group backed company has not only achieved Rs 1,000 crore mark in the 13 years but has kept launching products focusing on the youth such as ‘reversible shirt (shirts which can also be worn inside out), music shirts, bikers shirts and so on.
Similarly, Ahmedabad –based Arvind has developed four Rs 100 crore brands in the last five years – Rs 550 crore value brand Megamart, Rs 400 crore plus formalwear brand Arrow, casual wear brands USPA and Flying Machine are over Rs 250 crore and Rs 100 crore respectively. “Innovation was Provogue’s USP when they launched the brand but they don't have that anymore,” says Arvind Singhal, chairman of retail consultancy Technopak Advisors.
The numbers reflect that as well. Though the sales of the company, at Rs 788 crore in 2012, have been growing at 16.55 per cent compounded annual rate of growth in the last five years, profits have grown at a mere 0.76 per cent in the same period due to a sharp fall in 2009 and 2010.
Another marketing head of a Mumbai-based retail chain feels that the foray into mall development took the promoter’s focus away from the brand. Provogue entered mall development through Prozone Enterprises in 2006 and is currently developing four malls in the country.
No wonder, even managing director Nikhil Chaturvedi, agrees that the company has made mistakes. “The market and consumers have evolved and we recognise the need to reinvent ourselves and reconnect with our target customer. A highly focused and aggressive transformation process is underway.” Chaturvedi says.
Provogue commissioned a market survey by Shripad Nadkarni's MarketGate and is implementing changes suggested through consumer feedback and the agency, he adds
Though the company’s peers say that the retailer is too promoter driven, the company’s business head Tim Eynon says it has hired new professionals in key positions and made operations process-driven. Eynon, a veteran in international retail, was earlier the chief executive of Provogue’s mall development arm Prozone Enterprises.
Eynon says the company realised that shoppers, nowadays, no longer take fashion tips from Bollywood and hence, started to shift from Bollywood-centric promotions. It has also launched Club Provogue loyalty programme and training its staff for better store experience.
Out of 130 stores Provogue has, 25 stores have already been revamped, another 25 are in the process of being revamped. This process will be completed in the next six months. The company also wants to add another 300 stores via franchisee route in the next five years. Chaturvedi says the company will focus on opening stores only in large cities which have bigger opportunity. The target is to make Provogue a Rs 1,000 crore brand in the next five years. Of this, 40 per cent will come from new categories.
“To achieve this, a five-pronged growth strategy has been put in place,” says Eynon. Besides launching new fashion and accessories collections including new fabrics. The brand is also focused on its grooming products through the fast-moving consumer goods (FMCG) distribution channels. Six months back, Provogue launched a deodorant range. In the coming quarters, shower gels, shaving creams, and other grooming products are will be launched. A new inner wear line for men is in the works. With 160 distributors already engaged in six states, the company plans to expand to 1,250 distributors in the next three years.
However, peers aren’t sure if this new-found aggression will help the brand to gain market share. “The early 2000s was a totally different era. Today, building a brand is not easy, especially when the apparel retail is crowded and highly competitive,” says a CEO of a retail chain. But Jaydeep Shetty, chief executive of apparel chain Mineral says Provogue has a chance if promoters have the will power and management focus to drive the change. Only time will tell.