Arvind Ltd eyes premium fabrics for better margins

Our Bureau Updated - June 07, 2013 at 10:44 PM.

Kulin Lalbhai , Executive Director, Arvind Ltd, said thecompany plans to bring back denim in fabric retail. — P.V.Sivakumar

Integrated textile and apparel company Arvind Ltd plans to enhance its fabric business at the premium end of the spectrum. Its new brand Tresca, priced at Rs 700 a metre, is being positioned as a lifestyle brand.

The high-end suiting and shirting fabric market is already dominated by textile players such as Raymonds.

Arvind has been in the fabric retail business for the past 90 years and posted a sales turnover of Rs 500 crore this year. It is now looking to build brands in the fabric segment to get better margins.

Small town demand

Kulin Lalbhai, Executive Director, Arvind Ltd, said, “We expect Tresca to become a Rs 250-crore brand in the next 3-5 years. We expect our premium brand to get stronger since there is greater demand for fabrics in small towns.” The fabric category is growing in single digit between 5 per cent and 7 per cent, unlike readymade garments which continue to clock 25-30 per cent growth rates.

“Though spends may be down, there are discerning consumers who demand premium fabrics and it is not just limited to the metro markets, but even in smaller towns where consumption patterns are changing,” added Lalbhai.

The made-to-measure business is gaining ground with concepts such as the Denim Concept Club. “We are bringing back denim in fabric retail and there is demand for co-creating and personalising garments with fabrics,” he said. Currently, such personalised tailoring services contribute nearly 4 per cent of sales turnover at Arvind Stores.

The company’s retail business, under Arvind Stores, is also expected to get a boost with 400 additional stores planned in the next five years, with estimated revenues at Rs 600 crore. The average size of an Arvind Store is 1,220 sq ft while its flagship stores go up to 3,500 sq ft.

“Most of the additional stores will be through franchises, so there is going to be no capital expenditure as such,” added Lalbhai.

purvita@thehindu.co.in

Published on June 7, 2013 15:36