Wills Lifestyle, the premium lifestyle
retail arm of ITC Ltd, is in a combative mood
these days. The combat is not against
competition but against a slowdown that has
dampened the consumption appetite of the great
Indian buying class. The seven-year-old apparel
brand from the Rs 22,000-crore ITC Group is
looking to keep pace with its record of 25% plus
compound annual growth over the past few years.
The man in-charge, Atul Chand, divisional chief
executive of ITC’s Lifestyle Retail Business,
who has been with the Group for almost 21 years
(he joined as a management trainee in 1988) and
has seen ITC’s gradual transition from largely
tobacco to the non-cigarette FMCG space, is
finding it challenging to engage the discerning
consumer in the times of a global meltdown.
On a visit to Delhi for the Wills Lifestyle
India Fashion Week, he spoke to FE’s Radhika
Sachdev about the lifestyle brands’ makeover in
2008 through new-look stores, the launch of
short-cycle product lines and tie-ups with a
slew of architecture and store management firms.
How has Wills Lifestyle shaped up over the years
especially in the context of the branded apparel
industry in India?
At
present, the branded ready-to-wear industry in
India is worth Rs 20,000 crore, within which,
the premium segment (in which Wills Lifestyle
operates) is estimated at Rs 2,000 crore. The
mid-market segment (in which sub-brand John
Players is positioned) is Rs 4,000 crore.
The
average year-on-year (Y0Y) growth for the
industry was around 15% for menswear and 25% for
womenswear—growing from a much smaller base—for
the past few years. When we launched into this
market in 2001, it was highly fragmented, there
were numerous players and there was nothing that
could remotely be called a ‘premium’ range.
We
did three things when we entered this market.
First, we positioned ourselves firmly in this
emerging ‘premium wear’ category. Second,
realising that customers buy fashion for various
occasions, we introduced sub-branding into this
category. We expanded our portfolio from Wills
Sports (relaxed wear) in 2001 to Wills Classic
(work wear) in 2002 to Wills Clublife (evening
wear) in 2003.
Third, to strengthen ourselves as an
‘aspirational’ fashion brand, we became the
title sponsor of FDCI’s (Fashion Design Council
of India) Wills Lifestyle India Fashion Week, a
pan-India event that entered its seventh edition
this season.
We
are glad that over the years, this property has
evolved into a major B2B platform for the
fashion fraternity and has built equity for the
Wills brand as well.
Our
focus in this area has been of growing the
womenswear market, the share of which in our
portfolio has grown from 20% to 35% in the last
few years.
The contract with FDCI was renewed recently. Did
you have any second thoughts about this?
The
three-year contract was drawing to a close and
after careful deliberation we decided to extend
it because we take a long-term perspective on
relationships and associations. We figured,
there are tremendous synergies between the brand
and the event. This association strengthens the
business of fashion.
One
major outcome of this event is the Wills
Signature range, launched in 2006. It’s our own
line of designer wear sourced from leading
designers—Manish Arora, Rajesh Pratap Singh,
Rohit Bal, Rohit Gandhi and Rohit Khanna, to
name a few—at price points that make the
collection affordable to a larger consumer base.
Every year, we appoint a key designer for the
Wills Lifestyle India Fashion Week grand finale.
Last season, it was Manish Arora and this
season, its JJ Valaya and he, along with other
designers on our panel, created a collection to
match the demographic profile of our customers.
The Wills Signature collection is subsequently
retailed through Wills Lifestyle stores across
the country.
What is Wills Signature’s contribution to your
total sales?
It’s
around 15% of total sales and growing every
season. We see tremendous potential for growth.
There were rumours that FDCI had trouble-finding
sponsors this year?
Fashion is a nascent industry in India. It
requires serious commitment to promote and
strengthen the design and creative industry.
Nonetheless, most of our sponsors are back with
us. I would say that the current season has been
able to attract more sponsors than the last one.
I am confident that our collective efforts will
strengthen this property.
Has there been a significant drop in your sales
due to the slowdown?
The
year 2008 witnessed a decline in the footfalls
and the frequency of shopping across all retail
formats. We were no exception. Footfall in our
stores went down by about 20% but January 2009
on, we have seen some buoyancy. We are providing
customers more reasons to shop with us.
And what could those reasons be?
A
number of them, actually. To begin with, we have
realigned our marketing spends to activate
demand and convert footfalls into sales. We are
now doing a lot of below-the-line (BTL) tactical
spending to shore up volumes. If earlier, the
ratio of above-the-line to BTL activities was
70% to 30%, it is almost the reverse now.
We
are doing more retail activation, direct
marketing, in-store promotions and also
strengthening our customer loyalty programme,
Club Wills. About 55% of our sales come from
60,000 Club Wills members.
To
give our target consumers more shopping options,
we have decided to synergise with ITC-Welcomgroup,
our hotel chain, for setting up boutique stores.
We have opened a 1,500 sq ft store in ITC Maurya,
New Delhi, and are planning similar stores at
other ITC hotels.
We
are investing heavily in visual merchandising;
we have tied up with the UK’s Elemental Design,
the US-based FRCH and The Friedman Group to
improve our store design, train staff and to
enhance consumer experience. This has enhanced
store productivity by 10%.
In
addition, our range is being refreshed every
four to eight weeks. We hope that a faster
supply chain and shorter product life cycle will
keep customer interest alive in our brand.
We heard you have shut down some stores?
Let
me give you the larger picture. Retail is about
constant transformation. It is about expanding,
relocating to where your consumers are or want
to be, revisiting the rental model, revenue
sharing, franchisees etc. We are looking at all
that.
Another critical component is realty. Since
realty prices are witnessing rationalisation, we
have been able to get rent reduction of 30% to
40%.
We
are also in talks with developers about a
revenue-sharing model and are exploring the
franchisee route with a few others in emerging
markets such as Nagpur, Coimbatore, Guwahati.
As
of now, Wills Lifestyle has a presence of 55
exclusive stores in 30 cities and the target is
to expand this to 100 in the short term. Nearly
2 million customers walk into our stores every
year.
Where are the sales higher—on high street or in
malls?
The
conversion is always higher on high streets
(30%) than at malls (15%). That’s a worldwide
phenomenon. A customer who shops at an exclusive
branded store is already exhibiting some
preference for the brand, while in a multi-brand
store you have the opportunity to build equity
with a new customer. Eventually, both channels
feed into each other.
Last year, you rolled out your first television
commercial. Any such plans for this year?
Now,
our media mix is aligned more towards print and
outdoor. Therefore, no immediate plans of a new
television commercial.
