The Fumbling Fashion-Maker

As Benetton strives to extend distribution beyond the four metros, it has a lot to learn from the FUs experiment and why it turned turtle. Intercraft the brands owners hit upon a winning formula way back in 1981 and chose to take full advantage of their initial success. From just a few company-owned Intershoppe outlets in Delhi, Mumbai and Bangalore, the chain was furiously expanded to include Chandigarh, Lucknow, Nagpur, Indore, Kanpur and Jaipur.

Ironically, FUs brand strategy has lots of interesting parallels with Benetton.

For one, the brand image was decidedly radical. According to the company, FUs was simply an acronym for Fits-You-Superbly. But to the world in general, however, the name conjured parallels with the four-letter word. It was a deliberately chosen rebellious statement against tradition.

 

The brand name flared public imagination and Intercraft cleverly supported with some couldnt-give-it-a-damn campaign. A series of bold ads with the theme Oh! What a feeling featuring top model Sangeeta Bijlani in various poses. By the mid-eighties, the ads became even more radical: a young man wearing a tie and a denim, and a teenager jumping over a library table.

FUs had another ace up its sleeve. Apart from the standard denims priced between Rs 200 and Rs 250, Intercraft also released high-priced limited edition designer jeans at the start of each season which helped set the trend. Imaginatively named as Ship-wrecked Denims, Contraband Denims and Authentic Denims, this line helped FUs to cultivate its radical image. Along with that, three new colours were introduced every year, with different sizes for men and women. This was backed by sponsoring dance and fashion shows during college festivals.

While all this may seem pedestrian now, in the mid-eighties, it created a wave. So much so, in 1985-86, Intercraft was selling upwards of 40,000 pairs of jeans in a year. And as demand grew beyond all expectations, Intercrafts ambitions grew. First, it decided to turn FUs into a national brand by increasing the number of company-owned outlets, backing that up with a chain of franchisees called FUs Exclusif to reach out to the smaller cities and markets.

To cash in on the groundswell of support, Intercraft extended the FUs brand name to cover niches like womens wear, executive wear and even a range for teenagers. Its rationale: In the early eighties, Intershoppe was an exclusive teenage hang-out. By 1985, increasingly number of families began visiting the store. We then decided that we would offer something to everybody.

Expanding reach and range seemed sensible, but it opened up a Pandoras box. The sheer logistics of the franchisee network became impossible to manage. The logic of the franchisee was simply that volumes in small towns would not be enough to sustain investment in company-owned outlets. For instance, an initial survey in Muzaffarnagar town in UP showed that the volume of business in the town would be a twentieth of what it was at Intershoppe, Connaught Place.

Yet there was a clear image mismatch. Most consumers in small towns frequently visited the metros and were familiar with the Intershoppe outlets. Impressed by the ambience, these customers preferred to do their shopping in the Intershoppes, rather than in the dowdy FUs Exclusif stores.

There were problems of lack of control, resulting in frequent stock-outs. The large portfolio meant that franchisees tended to be very sensitive about not blocking their investments in inventory. They would rather face a stock-out in the process, irritating potential customers. What was more damaging was that franchisees began to sell below marked price during months when sales slumped. Another set of dealers began stocking other company brands. But the worst offenders started selling bangles and artificial jewellery at the outlets and began touting them as Intercraft products.

The final nail in the coffin was Intercrafts inability to manage quality. The surge in volumes set up sourcing problems. It forced Intercraft to outsource from local tailors resulting in sub-standard quality. There were additional problems in fabric sourcing too.

In the end, it left several thousand customers thoroughly dissatisfied. And by the late eighties, a new breed of competitors like Bata, Wrangler, Flying Machine, Pepe and Numero Uno joined in for company. Weekender too, launched its own retail outlets, leaving FUs without much scope for differentiation. And finally, the arrival of Benetton, with its high-profile United Colours campaign stole the FUs image of a radical fashion-maker. n

(Based on a story in The Strategist of July 6,93)