Lacoste had a slow growth in the fiscal year 2014-15. However, it has ambitious plans for 2015-16, and the brand is looking to double the store count in the country in another five years. Rajesh Jain, MD and CEO of Lacoste India, discusses the company's strategies and expansion plans in detail in an interview with Fibre2Fashion.com
What are the strategies to double the number of stores in five years?
We have a policy of selective distribution network. Considering the location, target profile, neighbouring brands, reach and brand positioning, we evaluate each new door carefully. We look at how premium the location is, adjacencies, etc, before we take a decision on opening a new door. With the successful establishment of a hub-and-spoke model in key cities like Delhi, Mumbai, Kolkata, Hyderabad, Bengaluru and Chennai, we have penetrated the market well with one or two big boutiques surrounded by medium-sized POS (point of sale) outlets. Apart from major cities, we are targeting tier II cities like Ludhiana, Amritsar, Chandigarh, Bhopal, Jalandhar, Jaipur and Pune where we have examined the behavioural and buying patterns of residents and have successfully established POS. We are evaluating opening more doors in these major cities, and are also keenly watching new developments in selective tier II cities for future expansion.
What are e-commerce and discounting strategies?
As an accessible luxury brand, Lacoste in its league does not believe in discounting, thus maintaining the loyalty and faith of the patrons in brand virtues and ethics. We are evaluating an e-commerce portal where we will host our own digital flagship. The idea again will not be to throw huge discounts, but to ensure that the patrons get the same experience and ambience that they get in offline boutiques. Most of our customers currently living in tier II cities and other major cities but unable to reach out to the brand, will be able to have an access to the brand via the portal. We will develop the digital flagship as a user-friendly interface, so that customers find a similar ease and comfort online as they experience offline.
Which markets in India are developed?
Delhi and Mumbai are the key markets for any bridge-to-luxury brand. They are well-developed for Lacoste India as well. We have penetrated these by having our presence in both high-street areas and malls. In both cases, the location of the brand in terms of reach, adjacent brands and proximity to the relevant target was the prime parameter to establish the boutique. Bengaluru, Chennai, Hyderabad and Kolkata were equally promising. Having said that, we have also targeted some next-tier cities like Ludhiana, Amritsar, Chandigarh, Bhopal, Jalandhar, Jaipur and Pune. We have been met with a great response from our discerning customers.
Please share details of fiscal 2014-15 and expectations from fiscal 2015-16, and the coming five fiscals in terms of growth percentage, turnover, etc.
We had doubled the number of POS in the preceding four years (till March 2014). In the preceding three years, we grew by over 100 per cent in sales revenue. We decided to go a little slow in our expansion for the financial year 2014-15 because of the sluggish economy and heavy discounting by e-commerce portals. Currently, we have a growth rate of 25 per cent CAGR. We plan to hit 50 POS by the end of this fiscal, and plan to double our turnover in the next 4-5years.
What is the demand for your products in terms of geography, age, product, etc? Which products do you target for store expansion?
Globally, Lacoste believes in propagating the same brand values and virtues everywhere in the world, maintaining the presence of the brand and its deliveries. In India, we follow the same strategy where we provide the same ambience and experience to customers. As far as products are concerned, since Lacoste is known globally as a complete lifestyle brand, distribution and retail always count as a major parameter. We try to ensure that customers get the best ensemble of the brand products in each and every POS, thus enhancing their trust in the brand and the POS. Apparel continues to be our largest selling category, followed by footwear and fragrances. Bags and leather goods is another category, which is growing at a fast rate.
Where will you set up stores next?
We are now calculating and evaluating more for mall locations as compared to high-street locations. Malls provide an ideal location for a complete family vacation of 4-5 hours, that too within a premium environment. With a huge gamut of brands to choose from, malls also have theatres, food courts, parking facilities, kid zones, etc, that further enhance the ease and comfort of customers. We will continue to leverage big cities and select tier II cities on the basis of premium retail development and target proximity. We will use our past experience to a robust, selective distribution strategy.
Published on: 30/11/2015
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
