Arvind sees brands, value-retail arms growing at 50% annually for 3 years

Arvind Lifestyle Brands Ltd and Arvind Retail Ltd, the brands and value-retail divisions of textile firm Arvind Ltd, are aiming at a turnover of Rs2,500 crore by 2015.

The brands division that has a sizeable portfolio of premium men’s wear brands is looking to bring in a few more international premium brands in women and youth segments, J Suresh, managing director, Arvind Lifestyle Brands and Arvind Retail told DNA.

The two divisions were demerged from the textiles company in fiscal 2010 and are likely to post 50% growth in topline this fiscal.

“We hope to grow by 50% every year for the next two-three years. It has been a wonderful year for us as a few things that we set out to do have taken shape,” Suresh said.

The lifestyle brands division has a long-term licensee deal with several international brands that are being sold through brand-exclusive retail outlets in the country. The current portfolio boasts of premium brands - Arrow, US Polo. Izod, and super premium brands - Swiss brand Gant and Italian denim wear Energie. All of these cater to the men’s segment.

“Now we are seriously looking to launch a women’s premium brand by September next year and a youth brand as well,” he said.

US Polo is in its second year of operation and is set to hit Rs100 crore in revenues next year. Similarly, denim brand Flying Machine that was relaunched is also progressing towards Rs100 crore. Formal-wear brand Arrow that was a Rs90 crore brand three years ago will cross the Rs270 crore mark this year, tripling sales in three years.

Suresh said that Gant, which saw a slow start, has now started to pick up well.

The divisions have plans to invest nearly Rs500 crore over the next five years, which will be funded through internal accruals. About 60% of the investment will go towards expansion of value-chain Megamart under the retail division, and the remaining towards opening exclusive stores of licensed brands. “We spend close to Rs80 crore every year, and so far we are able to generate that kind of money. Our model is pretty profitable one. In future, if anything is required, we may have to look outside for funds; but not in the two years at least,” Suresh said.

Now at 120 stores, Megamart will reach a 200 stores mark by the end of this financial year. The company has aggressive plans with Megamart and plans to open 100 stores every year for next two-three years in order to touch 400 stores by 2015. Megamart will also see addition of newer brands in the mass segment, Suresh said.

What has accelerated the pace of retail expansion for Arvind? “It’s about setting the business model right and doing profitable expansion. Earlier, expansion may have added to topline, but not necessarily to bottomline,” he said.