Going forward, we'll go aggressive in the womenswear category: Spykar

Spykar has largely been perceived a men's fashion brand despite having unisex merchandise in its portfolio for over two decades now. However, this is set to change as the company management has taken a conscious decision to push Spykar as a women's fashion brand with a range of denim-based merchandise on offer. Sanjay Vakharia, chief operating officer, Spykar Lifestyles Pvt Ltd speaks to Ashish K Tiwari about the company's business plans.

Q. Could you tell the brand and company's financials?

A. The brand has been around for almost 24 years now and is amongst the top 5-6 brands in the country. It also happens to be the only Indian brand amongst international labels leading the denim apparel space in the country. From the day one, Spykar has been positioned as a lifestyle brand that speaks to a younger target audience and not necessarily for denim requirements. That's one reason Spykar has been able to play beyond denims and establish a presence in everything that probably makes way into the customer's wardrobe. The business is profitable and we closed last year with revenues of around Rs 250 crore and a topline growth of 33%. We are looking at overall revenue of Rs 325 crore this fiscal.

Q. What's your retail footprint? Do you have company-owned stores in the network?

A. We don't have a single company-owned store. All of the 205 stores we currently operate are through franchisee operations. We are also selling through around 300 shop-in-shops with large format stores and additional over 1,200 multi-brand outlets across 300 cities. We are probably one of the few brands in the country that enjoy a very wholesome distribution with 40-45% penetration across metros and Tier I cities and 55-60% in Tier II and III towns where we also have the first mover advantage. Their contribution to the company's overall revenues also coincides in the same ratio.

Q. The assortment you are currently selling is primarily menswear?

A. Spykar has been a unisex brand from day one and the contribution of womenswear in the business has moved the way markets have behaved in the last couple of decades in the country. There are a lot of inherent options in the womenswear category and since we are in the casual wear space it tends to be defined by western wear only as yet. It's a very small portion of the entire womenswear portfolio. From that perspective, we were at around 22% at some point in time, which dropped to 12%. However, considering western-wear has become clothing of choice for a lot of people across all tiers, it presents a very good opportunity. As a result, there is a renewed focus to get more assertive and aggressive in this category going forward. So while we have grown the menswear business from 78% earlier to 88% at present, we will now be looking to grow the womenswear business from 12% to around 30% to the overall company's business in the next 2-3 years.

Q. How is Spykar placed to grab a pie of this market given the competitive pressure from international brands like Zara, H&M as well as brands like Kishore Biyani's Coverstory?

A. Zara and H&M are very large organisations and what they surely do is bring awareness in addition to expanding the market. However, they are not the format Spykar operates in because we are not a brand that will sell you everything in the apparels category. Spykar will be a hardcore denim brand and a niche within the niche. So I think as a vanilla brand we would surely address a particular need of our target audience versus serving them the entire clothing requirement. I don't think Spykar takes Zara or H&M head-on at all and has a very different offering compared to these brands.

Q. So in your view, what is the share of denim wear in women's wardrobe?

A. A research by IMRB International states that casual wear is the fastest growing category in the country and 72% of the respondents they spoke to associated denims with casual wear. As far as menswear is concerned, in casual wear, nearly 70-80% of the business comes out of denims for all the brands. The percentage share, however, is lower at 30-40% in the case of womenswear because they have so many other clothing options. Having said that, I think that 40% is still a very large number for a meaningful business to exist, grow and flourish.

Q. But that 40% is also dominated by brands like Lee and Levi's.

A. See, I am looking at Rs 325 crore in overall revenues for the company next fiscal. And am hoping that around Rs 35 crore will come out of womenswear category which is not a big task. Going forward even, if I'm chasing revenues of Rs 700 crore in the next 5 years, approximately Rs 200 crore will be from womenswear category and that's a very good number for any brand to boast about. Womenswear brands like 'AND' and 'Global Desi' do Rs 200 crore and I think Rs 35 in the first year is a very doable thing, in fact, much more than doable because we are very conservative on the numbers in that sense. So am not too worried on that front.

Q. What's your go-to-market strategy and how are you pricing the assortment?

A. The range will comprise nothing less than 300 stock keeping units. New additions to the range will be made annually. The idea is to grow the business between 30-35% year-on-year in the initial 3-4 years to be able to achieve a sizeable number. Pricing will be value-for-money because that's how Spykar has always priced its offerings for the market. The range should be between Rs 1,600 and Rs 3,000 and the target audience will be 15 years upwards going up to 30. We have identified 80-odd existing Spykar stores to start to sell the womenswear range and all of it will be in the urban markets. We will keep adding the number of stores gradually to expand the reach while also tapping the online space for selling the merchandise across locations where the Spykar womenswear range is not available as yet.

Q. What kind of marketing spends have you earmarked?

A. Given that it's a new launch, we have earmarked a higher spend to the tune of 12-15% of sales for marketing in the initial years. The channels adopted will largely be below the line (BTL) including digital depending on what the market demands. Sponsoring college activities is one of the key ways to establish a connect with our target audience and we have leveraged it extensively in the last two decades.