John Miller to step out of Pantaloon

Now the brand, along with 14 others, can be retailed outside Future Group’s own stores

KOLKATA: Kishore Biyani’s Future Group has decided to give up its retailing monopoly of 15-odd in-store brands.

The company has transferred these apparel and non-apparel labels, mostly owned by Pantaloon Retail India, to Future Brands so that these labels could also be retailed from stores not owned by the company.

The labels, which now will be made available outside the company’s own stores, include John Miller, denim brands Bare and Buffalo, apparel brands DJ&C, Ajile and Rig, youth brand Umm, consumer electronics labels Koryo and Sensei and home adornment brand Greenline.

This initiative is part of the group’s larger plan to develop pan-Indian brands.
 
“The mandate of Future Brands is to build strong pan-Indian brands with a strong local focus,” according to a company official.

Santosh Desai, CEO, Future Brands told DNA Money: “We will use the in-house labels in the beginning and then launch pan-India labels at a later stage.”

The group is looking at creating higher margins within the retail network. Looking at price points aggressively, Future Brands will attempt to create value through brand assets.
 
To set the ball rolling, Future Brands will start with retailing the menswear brand John Miller from Indus League stores - a Future Group division, and other multi-brand outlets (MBOs).
 
A retail analyst says, “If these are allowed to remain own-store labels, there will be no asset value. Same store growth may average 20% per annum. But, if spun off into independent brands, they will earn royalty.”

Desai said, “For retail to prosper, we need more branded merchandise and at the same time we will create a competitive advantage.”

So far, the group had made no investment in branding its labels. The company has now earmarked Rs 50 crore for a brand building exercise in 2008-09. Of this amount, Rs 8-10 crore will be channelled into John Miller.

The group will initially draw on the distribution strength within the group for the apparel brands and forge distribution partnerships for the non-apparel brands.

“Future Brands is a royalty-based company. Its mandate in the first year was to create brands. In its second year of operation, it will build a distribution network and in its third year it should see that all its brands generate revenues,” said Desai.