‘We’ll offer Italian fashion at mid-price levels’

At a time when most retailers have either shelved their expansion plans or are cutting back on them sharply, Brandhouse Retails is scouting for huge retail space across the country with an eye on falling rentals.

The company, which has brands such as Reid & Taylor, Belmonte, Carmichael House and Stephen Brothers, recently signed a Rs 160 crore joint venture agreement with Italian apparel company Gruppo Coin for the latter’s brand Oviesse. Brandhouse will now provide Italian fast fashion wardrobe solutions to mid-income consumers and open 190 stores across metros, Tier I and Tier II cities in the next five years. Tarun Joshi, managing director of Brandhouse Retail spoke to DNA on the company’s plans. Excerpts:

What’s new about the Oviesse deal?
We are going to offer premium fashion collection at affordable Indian prices and would be launching complete family fashion stores pan-India. We have identified the target age group for Oviesse brand between 18 and 35 years, and will cut across merchandise for men, women and kids. College-going, working-singles, and working-married individuals are the key spenders in our country.

How will you go about retail expansion for Oviesse?
We will start in October 2009 by rolling out 4-5 stores each in Mumbai, Delhi and Bangalore, and will go live simultaneously on the same day. Over a period of five years, we intend to reach 190 stores at attractive locations. The average size of a store will be 8,000-10,000 sq ft. The equity investment in this venture over the five years from Brandhouse and Oviesse will be Rs 160 crore. We will have 62.5% of total equity share, while Oviesse will be having the remaining.

What kind of sales are you targeting?
We are aiming for Rs 1,800-1,900 crore sales by the end of the fifth year. Oviesse will become our subsidiary as a result of this joint venture and we have very high hopes from it. The critical factor is that such high-fashion wardrobe solution has never been sold in India at affordable prices. The best fashion of world originates from Italy and we will be offering this fashion to India at mid-priced level for the Indian youth.

Do you plan to start manufacturing Oviesse brand products here?
In the initial first year, we will only be importing all the products from Italy. In a phased manner, we will be developing the sources in India. The design and quality control will still be Italian and we will work under the guidance of Gruppo Coin, but the manufacturing base will move to India. We will look at facilities in India and neighbouring countries to outsource the manufacturing so that duty composite comes down and we are able to maintain the competitive pricing.

How will you go about marketing the brand?
We will be introducing an international celebrity to India when the stores launch, and we are going to aggressively ensure that the marketing is in line with the requirements. We are going to be penetrative in our spends and market development and our marketing budget will be commensurate with that penetration.