Van Heusen to target smaller cities

"Every year, the company will open at least 40 new exclusive stores throughout the country, most of which would be in the tier-2 and tier-3 cities," Ajay Ramachandran, Brand Head of Van Heusen, told PTI here.

At present, 40 per cent of the brand's Rs 650 crore annual turnover comes from their 120 exclusive stores, most of which are located in the metros and large cities. With the opening of new outlets, Madura Fashion, owned by the Aditya Birla Group, is hoping that the turnover would jump to Rs 850 crore next year.

"At present, around 70 per cent of the brand's turnover comes from the top 7-8 towns. Corporates like us have not given enough importance to penetrating deep into the market," the company official said.

Pointing out that there is little headroom for growth in the metros, he said that the sales figure reported from smaller cities like Patna, Lucknow, Jaipur and Trichur are "mind-boggling".

"The per square foot sales is as good in the tier-2 cities as we have in the metros. Plus, the rentals are lower by at least 50 per cent. So there is a clear retail profitability which is emerging out of the smaller towns," Ramachandran said.

Places like Durgapur, Jamshedpur, Guwahati, Patna and Ranchi are on their list this year. Having invested around Rs 35 crore so far in opening exclusive stores, they will now invest Rs 4-5 crore each year to open the new outlets under a franchise model.

With aims to transform itself into a complete lifestyle brand, non-apparels will also be sold under the international Van Heusen brand, which was launched in India in 1990. A whole gamut of products including men's ties, belts, footwear, eyewear, watches and luggage will soon be available under the premium brand name. They will also enter the women's shoes and bags segment.

"We expect a good demand for these products as we can offer a complete shopping experience to our customers. In the next three years, the non-apparel business should contribute around 8-10 per cent to our total sales," Ramachandran said.