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‘This year the focus shifts back to profitable expansion' - 01 Apr 2010

Atul Chand, Chief Executive, ITC's Lifestyle retail business, on his plans for growth..

Completing a decade in the lifestyle business this year, ITC is now ready to seed the market with its offerings and venture into the tier-2 and tier-3 cities with its Wills Lifestyle brand. It has also given its mid-priced John Players brand a new face while it continues to build its premium brand, Wills Lifestyle, on the Fashion Week platform. Claiming to have achieved break-even status at the store level, ITC's lifestyle division is poised to grow at 25 per cent this year. Atul Chand, Chief Executive of ITC's Lifestyle retail business, outlines some of the changes he plans to make in the business to take it to the next level in a challenging retail environment. Excerpts:

What are the kinds of structural and operational changes you plan to implement in the apparel retailing business?

In 2008-09 the accent was on consolidation of the retail chain and strategic cost management. Key elements of this strategy were rental reduction of 25-30 per cent; closure of unviable stores; reduction in inventory and consolidating product lines; realigning marketing spends; focus on below-the-line advertising and activation to induce demand; strategic tie-ups with vendors for mutually beneficial partnerships. This year the focus shifts back to profitable expansion for both Wills Lifestyle and John Players. Currently there are 55 Wills Lifestyle stores in 30 cities across the country, and the brand is making rapid strides in terms of expansion, targeting 100 by 2012.

We plan to expand John Players' retail presence across the country and add over 100 stores in the next two years, taking the total to over 300 stores. About 50 stores are to be added this year alone. A total of one lakh sq. ft. of retail space will be added over the next two years.

Did the slowdown affect the Wills Lifestyle brand? Were the number of stores reduced during this period? Did the introduction of a value-for-money brand such as John Players help tide over this difficult period when consumers were downtrading?

The retail scenario has always been dynamic with the constant emergence of new market places and shopping catchments and the recent development of modern formats.

This retail transformation is a constant phenomenon and involves retailers reconfiguring their store networks in line with consumer preferences. Evaluation of store viability is an ongoing process and unviable locations are phased out. Going forward, we plan to expand to 100 Wills Lifestyle stores in the next two years. During the economic slowdown last year, consumer sentiment was weak and reflected in deferred purchases and downtrading, benefiting value brands such as John Players.

Wills Lifestyle continues to come under ITC's FMCG division. Considering that the stores also sell a number of ITC's FMCG brands such as soaps and fragrances, what kind of retail synergies will you exploit to build both businesses?

Wills Lifestyle stores, with their premium and loyal customer base, are a unique channel for ITC to test-market and generate trials for premium products. Our customers give us detailed feedback, which has aided us in gauging the response to a product and its performance.

The personal care business has also launched an exclusive and luxury suite of fragrances and personal care products — Essenza di Wills. The launch in the Wills Lifestyle chain of stores adds synergistically to both businesses: Wills Lifestyle offers premium lifestyle products to its customers and the personal care business gets exclusive access, shelf space and visibility across a premium lifestyle chain which has in excess of two million footfalls per annum. Our personal care products are also retailed through our large chain of over 200 John Players stores.

ITC Hotels has also been roped in to sell the Wills Lifestyle brand. How would you leverage your strengths in the hospitality business to drive your apparel business?

As part of our strategy to continuously leverage ITC synergies, we opened our first boutique store in ITC Maurya, which has provided us prime retail space and enabled us to tap a premium consumer base.

These boutique stores offer a significantly more premium shopping experience and serve as a bridge to luxury for Wills Lifestyle. We retail the higher end products of our range such as Wills Signature, Luxuria Formal Wear and premium accessories, leading to greater value capture.

How has the Wills Lifestyle India Fashion Week helped build the brand? Has there been a significant change in the apparel business since the time it associated with and sponsored the Delhi Fashion Week?

There has been a rapid increase in fashion consciousness and awareness among Indian consumers. Indulgence seems to be the key to the consumers' wallet as premium brands offer special products and services to retain much-evolved customers.

There is great synergy in the association of our premium lifestyle brand Wills Lifestyle with the fashion week and we look forward to further strengthening the deep-rooted partnership we have established with the fashion fraternity. This is Asia's biggest B2B fashion and India's premiere fashion event with over 100 participating designers in every edition and an increasing number of buyers, both domestic and international.

Wills Lifestyle caters to this need by associating with leading designers of the country in what we call the ‘Ramp to Rack' initiative. Started in 2006, we teamed up with the leading designers of the country to create the ‘Wills Signature' range of designer wear, which has been well received by consumers.

What investment has been made in John Players' brand building? You have appointed Ranbir Kapoor as brand ambassador for John Players — how much do you think celebrity endorsements can help apparel brands?

We launched John Players in 2003 with the vision of ‘making fashion accessible'. In 2005, we signed Hrithik Roshan as the brand ambassador to connect with the youth and give the brand a national presence.

Today, with rapid changes being witnessed across India, the values and attitudes of youth are evolving and John Players is reinventing itself to stay connected with its consumers. Brand Ambassador Ranbir Kapoor is a youth icon who reflects the values that the brand espouses — an innate sense of style and projecting it effortlessly. He brings optimism and effusive energy and reflects his own individuality not in any idiosyncratic way but by being cool and stylish.

We have also launched our new brand logo which reflects the evolution of the brand. It projects the values of ‘connected' and ‘boundaryless' and is also reflective of the world view of the infinite possibilities of the Indian youth of today.

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