Wills Lifestyle, the premium lifestyle retail arm of ITC Ltd, has said it is reworking strategy to protect bottom line and check a drop in sales, even as it has cut its growth forecast for the fiscal year.
Wills has shut four stores in the past three months and now plans to use ITC’s hotel properties to set up boutique stores.
The retailer recently opened a 1,500 sq ft boutique in ITC Maurya in New Delhi.
“Going forward, we are looking at opening more such boutique stores in some of our new hotel properties in Chennai and Bangalore,” said Atul Chand, divisional chief executive.
The Kolkata-based retailer is revitalising its growth strategy as sales at lifestyle retailers have slumped, forcing it to cut growth forecast for the fiscal year ending March to 20 per cent, from 30 per cent earlier.
The premium retailer has also shut down a store each in Bangalore, Mumbai, Surat and Kanpur. “We are redoing our business strategy in order to stay profitable,” said Chand.
The company is also tapping its loyal customer pool to ramp up sales. A few retailers, including Shopper’s Stop, have witnessed spurt in sales because of loyalty schemes. About 70 per cent Shopper’s Stop sales come from its First Citizens programme.
Wills is also devising special schemes and events for its 60,000 Club Wills (its loyalty programme card) members, who account for 55 per cent sales. It is also realigning its marketing spends towards below-the-line activities, bringing down spends on television and print advertising.
“So, if the ratio of TV and print advertising to consumer-centric activities was 70:30, it will be the reverse of this in the short term. We spend around 12 per cent of our turnover on advertising and marketing,” said Chand.
“We are looking at new-age media to attract more young customers. For instance, we are looking at tying up with social networking sites like YouTube and Facebook, or building a Hrithik Roshan community for a more personalised marketing,” said Chand.
Also, the company intends to offer more variety, designs and range to consumers every two months, which means it plans to redo its supply chain.
The company has 55 stores in 30 cities and plans to open another 10 in financial year 2009-10. Earlier, it had announced plans to have 100 stores by 2010-11.
According to Chand, the company closed down a store at Sarjapur in Bangalore because it not yielding enough sales. “When we opened, store in Sarjapur, we were paying Rs 100 per sq ft per month as rent, which the mall reduced to Rs 30 per sq ft per month. Still, the business did not pick up,” Chand said.
The company shut down another store in a shopping mall in Mumbai in December 2008 for which it was paying Rs 10 lakh per month.
“Only two days ago, the mall-owner in Mumbai said the rent could be reduced to Rs 2 lakh per month if we were willing to open the store again,” said Chand. Wills Lifestyle has also closed down a store each in Surat and Kanpur.