More retailers looking to take their private labels solo

Buoyed by the success of their private label brands, retailers have started spinning these off into standalone brands with exclusive stores.

To be sure, private label brands have been a hit with bargain-hunters. The in-house brands are typically priced at a 5-25% discount to other brands and are therefore preferred by consumers who are not too particular about a specific brand.

Rachna Aggarwal, CEO, Indus League, owned by the Future Group, said the company now plans to push its two private label brands into a bigger space. “We are exploring to take some good performing brands such as Bare or Rig from our portfolio and launching them as separate brands.”

The company had earlier launched exclusive stores of its John Miller brand and has also been retailing the product via multi-brand outlets.

Even Lifestyle has exclusive outlets for its private label ethnic wear brand Melange. The department store chain took this decision in 2011 after the brand clocked Rs 100 crore in revenue within three years of its launch.

Aggarwal said the decision to take a brand solo is taken based on the growth potential and demand in the market. “You can’t always wait for consumers to come to your stores and buy the brand. If the demand is very good and the brand is getting bigger, then it makes sense to have separate stores for it.”

Next in line is Gini & Jony, a player in the kids wear segment.

Anil Lakhani, executive director of Gini & Jony, said they plan to have standalone stores for their two brands – Palm Tree and GJ Jeans – by December. “We saw very good demand for these brands, especially for Palm Tree, in the smaller stores that they were being sold. They were contributing 13-17% to our growth and this gave us the confidence to have separate stores for them.”

Arvind Singhal, chairman of Technopak Advisors, said retailers aren’t always eager to take their brands solo mainly because building these brands and expanding the distribution network involves huge expenditure.

However, according to experts, the fact that consumers have been going in for affordable fashion and more value-for-money brands now will ensure that private label brands continue to grow in India.