Reported By:
| Edited By: Ashish K Tiwari |Source: DNA |Updated: Jun 06, 2018, 03:47 PM IST
Apparel brand Arrow has been selling in the Indian market for 25 years now through a licencing arrangement with Arvind Fashions. Sumit Dhingra, CEO – Heritage Brands Division, Arvind Fashions Ltd, in conversation with Ashish K Tiwari, talks about the division and focus on Tier-II and -III markets.
The division consists of three brands. Arrow is the biggest (in terms of revenue) being a heritage brand. Aeropostale was introduced a couple of years ago. Aeropostale is also growing very fast and is one of the very few brands in the country that has crossed Rs 100 crore revenues in just two years. The third one is Izod, which is also owned by Phillips-Van Heusen (PVH) Corporation along with Arrow.
If you look at Tier-I, brand Arrow is very well represented across malls and high street locations. So the next wave of expansion will be foraying Tier-II and -III locations. In fact, some of our best stores are in such markets. The kind of demand is huge and there are very few brands with near 100% market visibility/ awareness today. Stores in these markets will also follow the new design concept and carry a little over three months of stock as inventory.
Fashion preferences change from one location to another. Same styles go to each of these stores but tones, price points, preference of sleeve lengths (shorter / longer), etc. change. So the merchandise mix and inventory in each of these Tier-II and -III stores are planned, keeping the local demands and preferences in mind. For instance, fashion moves much faster in Tier-II and -III markets compared to Tier-I where the target audience prefers a more classic taste.
Accessories are around 5% of our revenue at present. We intend to take it up to 8% gradually. We are launching shoes as a category and it will have a more meaningful representation in the overall offerings going forward. If you look at our business, a big chunk of it is suits and blazers and being a formal brand, shoes present a huge opportunity for us to tap into and increase contribution from accessories.
Online is growing at 60% for us. Last year we finished with 11% contribution from online for Arrow. We see it growing to18% to 20% over the next four to five years that’s because it’s growing much faster than rest of the channels. Keeping in line with that initiative, we are also doing a major omnichannel push to make it easier for our customers to pick up apparels of their choice online or offline. Through partners, a bulk of the sale comes from top eight cities but given the internet penetration happening at such a rapid pace, it won’t be surprising that the phenomenon starts picking in smaller towns as well.
We have around 250 exclusive branded outlets (EBOs) for Arrow across India in addition to over 1,000 shop-in-shops. We will open around 55 stores this year and a bulk of them will have a store size of 1,000 sq. ft. Of the total number of EBOs that will open around 20% will be owned and operated by the company and the balance will be franchisee outlets. The first concept store for Arrow has been launched in Mumbai very recently and we will soon extend the same to our older stores as well. In fact, approximately 40 stores will get a refreshed look in this financial year. This is over and above the 55 stores that we will open this fiscal. Gradually, all our older stores will sport the new design format.
