NEW DESINER'S PLAN FOR ITC'S WILLS LIFE STYLE

Designer plans

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How Wills Lifestyle hopes to stand out in the crowded readymade apparel market.

ITC entered the apparel retail market in 2000 with Wills Lifestyle. Cigarettes, it knew, was no longer a sunrise business and it needed to diversify into areas where strong brand values can be created. Apparel fitted the bill. The market had begun to show signs of explosive growth as disposable incomes were climbing rapidly. To begin with, Wills Lifestyle had a range of formals for men and a line of western wear for the working woman. Over the years, the company has added new lines of evening wear, sportswear, designer wear, fragrances and accessories.

But the business, which comes under ITC’s fast-moving consumer goods division (2008-09 turnover Rs 18,129 crore, inclusive of taxes), is small ten years later. Atul Chand, chief executive of ITC’s lifestyle retail business division, indicates that the turnover of Wills Lifestyle could be around Rs 200 crore: “We have 10 per cent of the premium apparel retail market which is around Rs 2,000 crore in size.” Another Rs 150 to 200 crore comes from its value-for-money brand, John Players, which retails from 225 stores in the country. Chand’s division — Wills Lifestyle plus John Players — thus contributes a little over 2 per cent of ITC’s FMCG business. All told, the branded apparel market in the country is worth Rs 10,000 crore per annum — ITC’s share is therefore not more than 4 per cent. IDFC-SSKI Managing Director feels the small size of the business could work against it. “There could be a lack of focus because of the business being a small portion of the company,” says he.

It may not be big, but is it profitable? Chand does not share numbers. “What we have done has improved the profitability of our business,” says he. This could mean anything. But some other numbers illustrate a related point. Chand has 100,000 sq ft of retail space for Wills Lifestyle, which fetches him Rs 200 crore in sale. He, in other words, sells Rs 20,000 per sq ft per annum or a tad over Rs 1,650 per sq ft per month. Value retailers are at around Rs 400 per sq ft per month at the moment, while other lifestyle retailers are stuck at around Rs 1,000 per sq ft.

The readymade apparel market, it so happens, is highly fragmented. Madura Garments (Van Heusen, Louis Philippe, Allen Solly and so on) of the Aditya Birla Group leads the pack in the premium end, according to analysts, with a market share of 12 per cent. ITC, with a ten per cent market share, hasn’t done too badly. What it also means is that the market is extremely competitive and Chand has to keep the buzz around the brand alive at all times to tackle the rivals.

What has compounded his problem is that rivals like Madura Garments now offer a complete wardrobe like Wills Lifestyle. “We are present in all the addressable markets that exist,” says Madura Garments Chief Operating Officer Shital Kumar Mehta. With his original USP gone, Chand has his task cut out.