MxMIndia

Tag: Debenhams

  • Arvind's wholly owned subsidiary Arvind Lifestyle Brands is holding advanced talks to buy a large portfolio of retail assets, including Nautica stores, from Planet Retail

    Arvind eyes Debenhams, Next’s businesses; to take over brand rights, stores from Planet Retail

    By Boby Kurian & Reeba Zachariah

     

    Arvind’s Sanjay Lalbhai may acquire the operating stores and rights of British fashion retailers Next and Debenhams from Planet Retail, triggering another retail industry consolidation , said two sources directly familiar with the developments.

     

    Arvind’s wholly owned subsidiary Arvind Lifestyle Brands is holding advanced talks to buy a large portfolio of retail assets, including Nautica stores, from Planet Retail. “Arvind is doing due diligence to takeover operations of Next, Debenhams and Nautica, and a deal could be clinched shortly,” said one of the sources mentioned earlier.

     

    Mr Lalbhai’s move follows Aditya Birla’s decision to buy department store chain Pantaloons and Reliance Retail’s continuing strategy of striking partnerships with a slew of international fashion brands. Arvind would gain control over high-street brands providing fresh impetus to its fashion and retailing business, which brought in more than Rs1,200-crore revenue in FY12.

     

    Arvind Lifestyle Brands owns value retail chain Megamart and a slew of international and local brands, such as Gant, Arrow , US Polo, Elle and Flying Machine. It also holds a 50 per cent stake in Tommy Hilfiger’s India unit.

     

    Arvind declined to comment on speculation, while Planet Retail chairman Ramesh Tainwala could not be reached for immediate comments.

     

    Mr Tainwala, who controls Samsonite’s Asia-Pacific and West Asia business, and NRI entrepreneur V P Sharma equally own 97 per cent in Planet Retail. Kishore Biyani’s Future Group holds the remaining 3 per cent. Planet Retail controlled several international retail brands through licensing deals, but the potential sale to Arvind would leave it with fewer brands like The Body Shop and Accessorize. The Mumbai-based lifestyle retailer had earlier sold the operations of another UK retailer Marks & Spencer to Reliance Retail.

     

    While Debenhams plays in the department store segment , Next, which retails home products and accessories globally, have been a pure-play clothing retailer in India. Both brands have underperformed with very few stores, even after five-six years in the country. Sources said Arvind would acquire stores with revenue topping Rs130 crore once the takeover of the three brands was finalized.

     

    The transaction will be multi-pronged with Arvind acquiring existing operations – stores and some staff – from Planet Retail. Arvind would simultaneously enter into fresh agreements with Next, Debenhams and Nautica (owned by US-based VF Corp) to strike a fresh licensing agreement and business development plan for India.

     

    Business valuations in fashion retailing are 1-1 .6 times topline revenue, according to industry experts.

     

    Wholly owned subsidiary Arvind Lifestyle Brands are already in talks to acquire some staff and retail assets, including Nautica stores, Arvind will also ink fresh deals with Debenhams, Next & Nautica for India business.

     

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • Such alliances can provide the domestic partners with a slew of insights across the entire retailing process

    Local retailers partner global brands to launch own labels

    By Sarah Jacob

     

    Ramesh Tainwala believes that “women kindergarten teachers tend to be more confident mothers.” As analogies go, this one may border on the stretched but what the chairman of Planet Retail is attempting to convey is that retailers like him can pick up learnings by partnering with marquee brands, and then use them to boldly build labels of their own.

     

    Planet Retail, which has brought brands like Debenhams, Acceorize, Nautica and Next into the country, has begun flying solo with handbags brand Lavie. It’s not the only domestic retailer following a learn-and-launch strategy.

     

    DLF Retail, which has tied up with brands such as Claire’s and DKNY, launched in-house home decor chain Pure Home + Living a year ago. It is now set to flag off another format called Pure Kitchen Studio by November. Or take Lalit Kishore, master franchisee of sports footwear brand Lotto in India, who has launched his own brand of footwear called Globalite. And then there’s Devyani International, a franchisee for Pizza Hut, KFC and Costa Coffee in India, which has introduced South Indian fast-food chain Vaango independently.

     

    “It is easy to open outlets on your own. But international partnerships help in understanding the economics, food preferences and processes for standardised delivery,” said Virag Joshi, president & CEO, Devyani International.

     

    Alliances can provide the domestic partners with a slew of insights across the entire retailing process. Rohit Aggarwal, promoter of Lite Bite Foods, which started as a franchise for Subway, gives an example. “One takes for granted that the freezer or chiller is cold, but (working with an) international brand teaches you that the temperature needs to be checked every 30 minutes.” Lite Bite is now a Rs100 crore operation running not just Subway outlets but home-grown chains like Punjab Grill and Street Foods of India.

     

    International partnerships also help build a sophisticated team with focused skill sets. “Skills that the management feels can be leveraged without an additional cost to build their own brand in parallel with the primary brands,” said Gaurav Marya, president of Franchise India Holdings, which helps brands partner franchisees in India.

     

    There are plenty of synergies that can be availed of from sharing support functions and the supply chain. Economies of scale come into the picture on the advertising front, distribution, hiring and office space, too.

     

    Devyani International, for instance, has a common production unit or commissary in Gurgaon for brands across its portfolio. And Mr Kishore’s Globalite rides on the wholesale supply chain that is used to retail Lotto across multi-brand stores.

     

    Companies say that in the initial stages having international brands in the kitty helps with prospective trade partners. “A foreign partner carries a lot of weight,” said Mr Aggarwal.

     

    Kanchan Lall, associate VP at management consulting firm Tecnova, likens this trend to the development of private labels by retailers. “Once you grasp the understanding of a business, you look for avenues with higher margins and decision-making flexibility,” she said.

     

    The domestic brand builders rule out potential conflicts of interest, pointing out that the local labels typically operate in a different market segment. “Globalite would not matter to Lotto as the two cater to different price segments,” Mr Kishore explained. While Lotto retails at Rs2, 300 a pair on an average, Globalite is priced around Rs1,500 a pair.

     

    The seven-store handbags chain Lavie gains by being bundled with international brands in Planet Retail’s portfolio. “At the same time, Lavie also helps refine the strategy for the premium and super-premium brands in the portfolio and supports them with assurance of higher footfalls when negotiating with a mall,” said Mr Tainwala.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • Debenhams' Aditya Nadkarni says the international department store plans to open three to four new stores in India every year.

    Debenhams’ Aditya Nadkarni: Finding the right fit

    Aditya Nadkarni, Brand Head, Debenhams has been leading the brand to become the forefront of multi-brand retailing in India – setting new industry standards, venturing into uncharted territories and launching revolutionary retail concepts to provide an extraordinary shopping experience to the customers. Mr Nadkarni’s association with the retail industry started as an assistant manager – retail at Shopper’s Stop. Since then he has worked with several well known retail houses such as Trent and Piramyd where he undertook various operational functions and has been instrumental in the successful development and launch of a number of private labels as well as international brands like Blend of America, Versace, Versace Sports and Cerruti 1881. Here he talks to MXMindia’s Tuhina Anand on Debenhams’ plan in India.

     

    Q: How do you see Debenhams poised amongst the fashion brands in India today?

    Debenhams is the only premium woman-centric department store in the country today. We offer wearable fashion for the sophisticated, mature and well-travelled woman. We also provide assistance to women for their beauty and cosmetic needs, stylish home linen, speciality cookware, kids’ apparel and men’s apparel. As we offer not only international products but also products from international designers as well in every category, we believe we are unique in the premium department store segment.

     

    Q: Can you elaborate on your expansion plans for Debenhams this year?

    This year, we expect to make a strong entry with large format stores in Bangalore and Mumbai. We also aim to open three to four stores on an annual basis. Since Debenhams is a premium department store, we will be targeting Tier 1 cities.

     

    Q: How have you been promoting the brand here?

    We have focused our attention and resources towards working on an editorial basis with fashion media in the country. We also believe that our presence in the digital media space is helping to take the Debenhams brand to more and more people across the country. And of course, our customers are our brand ambassadors and they really do help to highlight the Debenhams name. Today, we enjoy one of the highest conversion rates in the segment, which is a result of the trust and confidence our loyal customers have placed on us.

     

    Q: With the FDI in retail, especially multi-brand retail, having gone to the back burner, does it in any way hamper your expansion plans?

    As a leading brand in our segment, we do not believe foreign direct investment in retail, multi-brand or single brand, would stifle our growth. In fact, we welcomed such regulation, as it would bring about more players in the segment and provide consumers with more choice.

     

    Q: With so many international players vying for the attention of Indian buyers, what advantage does Debenhams have?

    Debenhams enjoys the status of being the sole department store, in the premium segment, in the country today.

     

    Q: How do you view the fashion retail sector, especially for international brands – the size and opportunity – in India?

    Over the years, Indians have developed their fashion sense to mirror other countries and the latest trends. We see that with consumers travelling more and becoming savvy about international trends and lifestyles. The Indian consumer has evolved much more in the past decade than ever before. With the Indian economy growing positively, consumers are able to more afford the international brands present in the country today.

     

    Q: What is the kind of investment that Debenhams will make in India in the next three years?

    Debenhams is looking at opening three to four stores per year. The stores will range from 30,000 sq ft to 40,000 sq ft each. We expect to make substantial investments, keeping customer demographics and psychographics in consideration. Each store will be equipped with the traditional superior fit-out and superior quality staff.