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Lifestyle retailers upbeat despite fall in growth rates

Posted by retailigence on January 12, 2009

In the face of the economic slowdown, lifestyle brands are putting up a brave front. While consumer buying may not be as big as one would like it to be and sales growth rates have dipped, the scene is not as bad as in the Western world, say retailers as they hope for a positive year ahead.

“Fashion retail has not been impacted in a big way. Not even 0.5 per cent of the working population has been hit in India,” says Mr Tarun Joshi, CEO and MD of Brandhouse Retails, which manages exclusive outlets for S.Kumars Nationwide brands – Reid & Taylor, Carmichael House, Stephens Brothers and Belmonte. (Brandhouse is also the exclusive India franchisee for luxury brands Alfred Dunhill and Escada.)

The Indian economy is more stable than other economies across the world and one must not confuse India with the rest of the world, says Mr Sandeep Kulhalli, V-P, Retail and Marketing, Tanishq. While admitting that the company’s rate of growth has slowed down, the Rs 2,000-crore jewellery brand believes it can still post a 30 per cent growth in sales this year.

At Tanishq, studded jewellery had a sales growth of 40 per cent in the first few months of the financial year; it has dipped to 20 per cent now. “But this is good enough for us to maintain competition and sustain. The people who are hit worst in India are those who invested in real estate, property and the stock market, not retail. Of course, sentiments are poor; there is some pressure. Spending may not be robust but people are still buying. The salaried class will still be with us,” says Mr Kulhalli.

Which is why Tanishq is keen to remain connected with the consumer. It hopes to continue marketing efforts with zeal as it sees no reason to cringe and “pull out of consumer space.” Currently, a TV campaign is on air featuring its new diamond collection – Aria. Tanishq plans to launch more collections backed by customer activities. It is planning a marketing effort for plain gold in association with the World Gold Council next quarter.

Brandhouse Retails too has big plans for the Indian market, which includes a joint venture with a European private apparel label the next financial year, apart from the launch of a few more international brands.

The current crisis in the real estate market may have put the brakes on its store expansion plans, but Brandhouse hopes to tide over the situation and meet its target. “Real estate and mall projects are being delayed endlessly. That has set us off a bit. But we hope to meet our target of 859 stores by FY09. Currently, we are close to 700 stores,” says Mr Joshi. He hopes the Rs 313-crore Brandhouse Retails will finish this year with a topline of Rs 700 crore.

Sources :- The Hindu


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