News: VF Corp unit eyes 10% of Indian premium mkt
(RTR 20/05/2006) New Delhi - A unit of apparel firm VF Corp, which owns lifestyle brands such as Nautica, plans to win a tenth of India's booming premium apparel market as it opens huge stores in Asia's third largest economy, it said on Friday.
"India is the next frontier of growth," Denise Seegal, president of the wholly-owned subsidiary VF Sportswear Inc., told Reuters in an interview.
A fast expanding economy, dual incomes and rising aspirations are fanning 50 percent annual growth in India's 0 million premium clothing and accessories market, where almost half the sales are apparel.
A growing middle-class, estimated at more than 200 million, is the target audience for dozens of global brands faced with tepid demand in many western markets.
"We are looking at a 10 percent market share in 3 years. India is just beginning the same growth cycle that China began 10 years ago," Seegal said.
The Nautica brand would invest about 300 million rupees (.5 million) in India over three years, she said, opening 12 stores in seven cities selling Nautica products such as sportswear, tailored clothing, eyewear and accessories.
India allows foreign chains selling single brands to own up to 51 percent of their local joint ventures. They cannot set up wholly-owned retail formats and have to use franchisees to tap growing demand.
VF Corp is partnering Arvind Brands Ltd. part of the textile group led by denim maker Arvind Mills Ltd.
VF Corp's portfolio includes Lee, Wrangler, Vanity Fair, Lily of France, Bestform bras and other lingerie. VF Corp has 122 shops in China, mostly 500 square feet each.
"Shanghai and Beijing are much further developed (than India) in the retail scene," she said. But Seegal added the India strategy would be different and stores here would be large. The company opened its largest single brand store, 6,800 square feet, in Bangalore, India's silicon valley, on Thursday.
Another 3,700 square feet of space opens in an up-market tony shopping area in New Delhi, the capital, on Saturday.
Seegal declined to say what percentage of global sales were expected from India, but said 15 percent of billion retail sales came from outside the United States in 2005.
Many global brands, especially in apparels, follow a twin pricing strategy in India, selling clothes at a discount to woo first time customers and build brand awareness.
But Darshan Mehta, president of Arvind Brands, said Nautica would maintain its premium image in India and clothes will retail at "New York prices". "The premium consumer is not looking to buy last season's product at a lower price," he said.
He said Nautica's core audience was about one million households with an annual income of 4 million rupees growing at 30 percent a year, adding another 4 million households earning more than 1 million rupees annually was the aspirational segment. "This next layer is also coming up very fast," he said.
"India is the next frontier of growth," Denise Seegal, president of the wholly-owned subsidiary VF Sportswear Inc., told Reuters in an interview.
A fast expanding economy, dual incomes and rising aspirations are fanning 50 percent annual growth in India's 0 million premium clothing and accessories market, where almost half the sales are apparel.
A growing middle-class, estimated at more than 200 million, is the target audience for dozens of global brands faced with tepid demand in many western markets.
"We are looking at a 10 percent market share in 3 years. India is just beginning the same growth cycle that China began 10 years ago," Seegal said.
The Nautica brand would invest about 300 million rupees (.5 million) in India over three years, she said, opening 12 stores in seven cities selling Nautica products such as sportswear, tailored clothing, eyewear and accessories.
India allows foreign chains selling single brands to own up to 51 percent of their local joint ventures. They cannot set up wholly-owned retail formats and have to use franchisees to tap growing demand.
VF Corp is partnering Arvind Brands Ltd. part of the textile group led by denim maker Arvind Mills Ltd.
VF Corp's portfolio includes Lee, Wrangler, Vanity Fair, Lily of France, Bestform bras and other lingerie. VF Corp has 122 shops in China, mostly 500 square feet each.
"Shanghai and Beijing are much further developed (than India) in the retail scene," she said. But Seegal added the India strategy would be different and stores here would be large. The company opened its largest single brand store, 6,800 square feet, in Bangalore, India's silicon valley, on Thursday.
Another 3,700 square feet of space opens in an up-market tony shopping area in New Delhi, the capital, on Saturday.
Seegal declined to say what percentage of global sales were expected from India, but said 15 percent of billion retail sales came from outside the United States in 2005.
Many global brands, especially in apparels, follow a twin pricing strategy in India, selling clothes at a discount to woo first time customers and build brand awareness.
But Darshan Mehta, president of Arvind Brands, said Nautica would maintain its premium image in India and clothes will retail at "New York prices". "The premium consumer is not looking to buy last season's product at a lower price," he said.
He said Nautica's core audience was about one million households with an annual income of 4 million rupees growing at 30 percent a year, adding another 4 million households earning more than 1 million rupees annually was the aspirational segment. "This next layer is also coming up very fast," he said.
posted by InCar Group Press Room at 15:20
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