India-born chief executive officers (CEOs) of multinationals are now the toast of the world. In conservative Switzerland, another experiment is underway where a 30-year-old, $300-million luxury goods brand for men is shedding its diffidence and donning the ‘affordable’ tag to charm the world — thanks to its Indian managing director Anuj Sawhney.
Anuj’s father Ashok, who was active in the watch trade, first met up with the Swiss Principals as a sourcing partner. It was in 1984 that Jacques Bögli started making watches under the brand ‘Swiss Military’. His son Jean-Luc Bögli extended the brand with a clothing line. Somewhere down the line, the Sawhneys persuaded the Swiss principals — Bögli Trading & Selling AG — to take the brand global and extend it and today the Sawhney-owned Promotional Shirt SM Pvt owns the rights to the brand across 40 countries, Anuj Sawhney told Deccan Herald recently.
The Sawhneys literally shook up the brand, and today it boasts of a presence in 26 countries with 1,800 stock keeping units (SKUs) sourced from eight geographies and 212 vendors. Some 250 SKUs are available in India and growing, in the Rs 400 to Rs 13,000 price range. Anuj said the brand is in its third phase in India since April 2014, with a more consumer-focused presence in multibrand outlets (shop-in-shops). The brand has quickly scaled installations of its two-feet-by-two-feet towers in 550 multibrand outlets across the country, and is now looking at opening 11 company-owned and 160 franchisee-owned stores in two years from December. The two-year target for shop-in-shops has been set at an ambitious 4,000, Anuj said.
Incidentally, the Swiss Military brand is sold across 11 company-owned stores and 600 shops in Europe. Of the 600 shops, 200 are franchisee-run. The remaining are multibrand shops. Anuj said the largest company-owned store in Europe is the 27,000-sq ft Edelweiss Shop in Interlaken, Switzerland. In Bengaluru, where the first company-owned store is coming up, the brand is searching for up to 5,000 sq ft of space, Anuj said.
Unique distribution model
Swiss Military practises a unique, hub and spoke model in India, where the distributor supplies to the retailer. Distributors are given up to 45 per cent discount on the MRP for select goods, out of which 30 per cent is passed on to the retailer. Anuj said the MRPs are strictly enforced since the Swiss Military brand is never discounted.
The Swiss Military MD said the brand is very particular of not entering into consignment basis, or stock-on-return basis deals with large retailers, but works on an advance basis with a fixed margin. It also refuses to pay brand name fees or display fees to large format retailers. Further, it insists on central display for its vertical towers in shop-in-shops, and makes sure that product promotions are done by individuals on retailer rolls. Anuj said all this is possible because it guarantees it will give retailers twice the turnover than any other brand in their store on a per square feet basis. It also trains the retailer’s employees in Delhi to promote the SKUs.
Anuj said there is an art to arranging the display in verticals, where 104 SKUs fit in. “There's a specific way in which the units — mostly pens, leather, electronic goods — are packed so that the display is not cluttered, but space is maximised,” he said. He disclosed that many new products trace their origins to suggestions from the brand’s three million customer database. “It takes 18 months from concept to production before a new product hits the shelves,” he said. According to him, fully six months are spent getting approvals from the Swiss Principals, who are sticklers for quality.