Monday, June 24, 2024

The Collective to open 20 stores in FY24

New Delhi: Aditya Birla Group’s decade-old, luxury multi-brand retail store, The Collective, among other brands, will add 20 new stores in the next one year. Of this, ‘The Collective’ will have 10 new stores, while the other outlets will be for mono-brand stores like Hackett, Fred Perry, Ted Baker, Polo Ralph Lauren and Ralph Lauren, said Amit Pande, brand head, The Collective & International Brands at Madura Fashion and Lifestyle said in an interview.

The company operates 33 stores in India of which 14 are for The Collective brand. The entity housed under Madura Fashion and Lifestyle, is a division of Aditya Birla Nuvo Ltd. Madura also owns and operates brands such as Louis Philippe, Van Heusen, Allen Solly, and Peter England with about 1,300 stores in India.

“Pre-covid, we were under a lot of competitive pressure since we had been investing across the board but were not profitable. But we decided to restrategise our businesses by listening more to what customers wanted and became available at the places they wanted to shop at,” he said.

The company had a negative return on capital in FY19 but has since turned profitable, said Pande. It is now looking at 50% in FY23 from a year ago and expects to close the fiscal year with a gross turnover of 450 crore.

In FY22, 37% of its business (including mono-brand stores) revenue was from out-of-store sales, including digital, which made up 22%, besides personal shopping, out-station servicing and call centre sales. Overall pre-covid, revenue from non-store sales was at 14%.

Pushpa Bector, executive director, DLF Retail and head of luxury and shopping malls for the firm, said there is significant growth in the bridge-to-luxury segment. “Just like other bridge-to-luxury brands The Collective has also shown promising growth in malls.”

“We have an all-India pincode map to figure out where the business is coming from. In these locations even where we did not have stores, we started digital and tele-servicing,” said Bector.

The business is generating its own money to sustain own growth. It is targeting growth of four times in the next four years, and expects to finance the new stores through internal accruals. The firm spends 10,000- 12,000 per sq. ft. for each store, with store sizes of 7,000 sq. ft., which translates into 7-8 crore per store. The investment can be double for mono-brand stores, and each store takes 6-7 years to recover the investment amount.

The company has expanded significantly in tier 2 cities like Ludhiana, Pune and Lucknow. Next month, it will launch a store in Ahmedabad, besides assessing locations like Jalandhar, Indore and Raipur for The Collective brand.

In e-commerce, its business is evenly split between store and non-store towns. “A lot of similar businesses reported that business was back to offline once the covid restrictions had been lifted. But it was not the case for us,” Pande said.

Within the larger business, it is seeing significant growth in its women’s apparel segment. “Covid was a very interesting time. That year we never dropped revenue and grew only 3% but from a consumer trend perspective things had moved to athleisure products. But since then, T-shirts as a trend have stuck and have become a very important category for us now,” he added.

The Collective also plans to add niche Japanese brand A Bathing Ape (BAPE) to its portfolio in FY23.

According to Boston Consulting Group, India’s fashion market would touch 5.7-5.8 trillion by 2024. The growth will be driven by premiumization, greater penetration of ecommerce and a focus on private labels and the entry of international brands.

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