Aiming to take forward its retail business to the next level of diversification, the Rs 19,000 crore strong RP-Sanjiv Goenka Group has marked its foray into the apparel sector and is eying Rs 300 crore turnover in 3-4 years from this business.
Christened 2BMe, the products cover men, women, kids, innerwear and accessories range. Additionally, it will also offer a special range of organic men’s innerwear.
“Initially, the products will be made available in the Spencer’s Retail stores for 2-3 seasons and based on the response, we will take a call to introduce it to other apparel retail outlets”, the group’s head of retail sales, Shashwat Goenka said.
While the new brand will be a part of the Spencer’s Retail portfolio, chances are that the group may decide on spinning off an entirely new business in the apparels vertical.
“We’ll take a call on this based on how it performs”, he said.
At its current stage of introduction, the brand is modelled on lines of ‘fashion at Big Bazaar’ with prices ranging from Rs. 129-1299.
On the marketing front, the products will be sold as per season. It has divided each season into three sub-seasons, where over 60 per cent of the product range will have a complete overhaul every six weeks.
According to Goenka, who opined that apparels offer better margins than the foods business, this strategy will help increase sales as new product choices will be given to the consumers.
While it is sourcing the apparel from Indian companies, it is also importing part of the material from China.
In the first year of the introduction at the group’s retail stores, the company expects the new business to contribute 5.5 per cent of the total sales and 10 per cent to the bottomline at Spencer’s Retail’s annual turnover.
However, this is not the first time the group is testing waters with apparels. Earlier, Spencer’s Retail had launched two private labels – Island Monks and Asankhya – across its stores creating special sections for these brands.
However, just before it decided to roll out the new apparel brand, the private labels were taken off shelf and the clothing section in the retail outlets were closed down. It is certain that the two former private labels will not be revived since these can cannibalise the new brand.
During 2015-16, apparels contributed five per cent to the Rs. 1,859 standalone turnover of Spencer’s Retail. In the first year of operations, revenue from the new brand will mostly replace the earning from its private apparel labels.