BRAND HOUSE Retails Limited The Fashion Enabler March 2009 The - - PowerPoint PPT Presentation

The Fashion Enabler

BRANDHOUSE Retails Limited

The Fashion Enabler

March 2009

The Fashion Enabler

Section 1 : Corporate Overview

The Fashion Enabler

The Story so far…

2004 Reid & Taylor Retails Pvt. Ltd. established To develop the EBO retail network for the brand 2006 Rechristened as Brandhouse Retails Ltd. Global Luxury brands (dunhill & Escada) choose BHRL as their exclusive India Franchisee Scope extended to include retailing of

• ther SKNL brands

A strong retail team & systems puts BHRL in the radar of international brands entering India

Year Activity Rationale

2008 BHRL is demerged by mirroring the SKNL shareholding pattern. For every 5 shares , SKNL shareholders get 1 BHRL share

• Retailing dynamics requires a

special focus

• The company is looking at brands
• ther than SKNL
• Unlocking shareholder value

2009 Brandhouse inks JV with Italy’s

• No. 1 fashion brand

Brandhouse Retails listed in March 2009 Offering true Italian fashion at Indian Prices for Indian youth Post all mandatory clearances from SEBI, BSE & NSE

The Fashion Enabler

The Shareholding Structure

The Fashion Enabler

THE GROUP

SKNL

SKNL International SKNL Divisions

Reid & Taylor

(India) Ltd.

Brandhouse

Retails Ltd.

GIC

SKNL UK Ltd. SKNL Italy SpA

EBOs

SKNL Brands

EBOs

• Int. Brands
• Pvt. Label

Joint Venture

75 % 25 %

The Fashion Enabler

The Strategy behind Brandhouse SKNL

• Institutional Sales
• Export Sales
• Large Format Stores

Trade Channels Multibrand/ 3rd Party Retailers The Customer Business Opportunity for Brandhouse

Retailers’ Margin

The Fashion Enabler

Section 2 : The Business Dynamics

The Fashion Enabler

Vision & Mission

The Retail Gateway of India for Fashion & Lifestyle Provide a Provide a distinct competitive distinct competitive edge edge to our brands by to our brands by creating creating an International Retail Experience an International Retail Experience for addressing the booming for addressing the booming Indian Consumerism Indian Consumerism

The Fashion Enabler

Sell @ MRP Produce & Sell @WSP

MRP –WSP = Margin

Brand A Brand B Brand N

Consumer

The Business Model

The Fashion Enabler

The Customer-Centric Best Model

The Desired Store Perception Easiest

(Accessible &

Approachable)

Friendliest

(Courtesy &

Service)

Honest

(Price guarantee &

Trust)

Latest

(Contemporary &

Socially correct)

Widest

(Range & Choice of

• ffering)

The Fashion Enabler

BHRL’s Key Strengths

1 Human Resource 2 Systems Driven Approach 3 Integration with SKNL 4 Strong Brand Mix

The Fashion Enabler

1 Human Resource

A strong, experienced team of retail professionals create the cutting edge in a very competitive scenario

The Fashion Enabler

Retail Operations Business Development

CEO

COO

Business Development

COO

Operations Scouting New Stores Commercial feasibility Legal Clearances Architect Coordination Setting up stores Hiring Staff Managing Stores Analyzing Performance Buying & Merchandising Staff Training/Incentive Visual Merchandizing Advertising/Promotions

The Functional Division

The Fashion Enabler

Managers, Executives & Support Staff

The Organogram

MD & CEO

COO

Business Development

COO

Operations

CFO

VP Acquisition (Real Estate) VP Projects (Store Implementation) VP 1 GM Accounts Company Secretary & Legal GM IT GM Commercial

Regional managers and executives in the 4 regions of India

VP Buying & Merchandising GM Luxury VP 2 GM HR

The Fashion Enabler

Thumbnails of our Key People

Tarun Joshi M.D. & CEO 45 years old with over 23 years of experience in marketing, communications & Retail. Has worked with leading multinationals Surjit Singh COO Development 43 years old with over 20 years of experience in marketing &

• Retail. Has worked with Crossroads, ZEE TV & Akbarallys

Ashok Dalal COO Oviesse 42 years old with over 18 years of experience in Advertising &

• Retail. Has worked with Tata Exports, Westside & Pyramid Retails

Indraneell Basu V.P. Operations 35 years old with over 12 years of experience in Retail. Has worked with Benetton, Wills Lifestyle & Titan Amit Chopra V.P. Operations 34years old with over 14 years of experience in Retail. Has worked with Wills Lifestyle, Pizza Corner, Nirulas. Sameer Sikka V.P. Real Estate 34 years old with over 10 years of experience in Retail. Has worked with Raymond’s, Shopper’s Stop & Weekender Paritosh Jain COO Operations 45 years old, with over 20 years of experience in Retail. He has worked with Bata, Raymonds & Wills Lifestyle

The Fashion Enabler

2 Systems Driven Approach

Objective, systematic approach that maximizes productivity & efficiencies

The Fashion Enabler

Integrated, Systems-Driven Retail footprint

Shoppers IT Software SAP

Buying & Merchandising Marketing Store Operations Finance Human Resource Development Information Technology Logistics & Supply Chain Business Development

The Fashion Enabler

The Holistic Approach to Retailing

Consumer Comprehension

Demographics

• Geographic Spread
• Affluence Levels
• Wallet Monitor

Psychographics

• Usage & Attitudes
• Needs & Wants
• Aspirations & Desires

Brand Comprehension

The Tangibles

• Product attributes
• Range & Seasonality
• Pricing strategy

The Intangibles

• Brand Positioning
• Brand Identity
• Brand Values

Retail Comprehension

External Environment

• Location Aspects
• Commercial Viability
• Long-term Outlook

Internal Environment

• Visual Merchandising
• Inventory Management
• Service & CRM

The Fashion Enabler

Operational Strengths – Highlights

Area Challenges BHRL’s Strengths Real Estate

Limited supply Very high Rentals Dedicated team of professionals with constant mapping of Indian market. Early information & action enable early entry into new projects at better costs Collective bargaining (all brands) for better rentals

Projects

Quality, Time & Cost management pan India In-house team of architects & related specialists Regional tie-ups with contractors Collective bargaining with vendors

Operations

Skilled Manpower Quality Standards Inventory Management Regular training & career development opportunities programs to attract & retain quality manpower

Innovative incentive packages for added motivation

S.O.P. manual implemented through national / regional teams. SAP (I.S. Retails) under implementation for better systems with special focus on Merchandise Planning.

Knowledge Bank

Competitor performance Industry Information Consumer track Data collection by regional teams (monthly) Subscription to various industry reports Regular research & surveys

The Fashion Enabler

3 Integration with SKNL Group The advantages of being a part of a large group with over six decades of experience in textiles & fashion

The Fashion Enabler

The Overall Picture

BRANDHOUSE

R E T A I L S SKNL Group International Brands Captive Business Retail Support Retail Expertise Business Avenues Outsourcing / Manufacturing

The Fashion Enabler

The Other Advantages

Marketing Logistics & Supply Chain Buying & Merchandising

SKNL Group

Sourcing & Manufacturing

The Fashion Enabler

4 Strong Brand Mix

The advantages of having a strong portfolio of brands with strong equity & a well- established track record

The Fashion Enabler

Solid Brands with Strong Brand Equities

Brand Profile

Reid & Taylor A 165 year old heritage brand from Langholm, Scotland, Reid & Taylor was launched in India in 1999. Today it is a premium suiting and apparel brand with a very high brand equity. As on Mar 08, it has 158 EBOs across the country. Belmonte A unique combination of Fabric & Apparel in the mid-price segment, Belmonte has grown into a well-recognized brand in two years, since launch. As on Mar 2008, Belmonte has 103 EBOs across the country Carmichael House A mid-premium home textiles brand Carmichael House has become the No. 2 brand in the country in less than two years. As on Mar 08, it has 113 EBOs across the country Stephens Brothers A Super-Premium Brand SB is a JV between SKNL and Austin Reed, UK. It

• ffers formal wear for men & women. As on Mar 08 it has 19 EBOs in India

dunhill A leading Luxury brand for men, dunhill has 3 boutiques in India. In a nascent Luxury market in India dunhill is already a leading name for men’s apparel & accessories within one year of launch

The Fashion Enabler

Section 3 : Performance & Projections

The Fashion Enabler

Financial Overview

2007-08

Audited

2008-09

Audited

2009-10

Projected

• No. of Stores

398 683 909 Area (Sq.ft.) 4,18,415 666,575 911,100 Revenues (Rs. Cr.) 313.79 552.35 812.72 EBIDTA (Rs. Cr.) 31.22 41.18 78.84 EBIDTA % 9.95% 7.45% 9.7% PBT (Rs. Cr.) 22.63 24.12 33.40 PBT % 7.2% 4.4% 4.1% PAT (Rs. Cr.) 13.31 13.39 22.15 PAT % 4.2% 2.4% 2.70%

The Fashion Enabler

Rental matrix – Own Stores

Rent/PSF month Metro Tier 1 Tier 2 Reid & Taylor 225 175 125 Carmichael House 175 125 80 Stephens Brothers 300 200

• Belmonte

160 125 90 Luxury 800

The Fashion Enabler

Growth Plan in terms of Sales/Sq ft/ Day (PSFPD) Sales/PSFPD 2008-09 Reid & Taylor 27.06 Carmichael House 16.41 Stephens Brothers 31.88 Belmonte 19.15 Luxury 53.33 TOTAL 22.69

• All PSFPD figures in INR
• All PSFPD is calculated on carpet area

The Fashion Enabler

Section 4 : The Indian Retail Industry & Fashion

The Fashion Enabler

Indian Economy & Retail GDP USD 804 Bn

Private Consumption USD 482 Bn ( 60%) Public spending & Gross Capital formation USD 322 Bn ( 40%)

Non - Retail USD 182 Bn ( 38%) Retail USD 300 Bn ( 62%)

Source : Central statistical Organization & Technopak Analysis

Retail is a key driver in the Indian economy (37% 0f GDP)

The Fashion Enabler

Growth of Organized Retail in India

2002 2007 2011 (Projected)

Total Retail Organized (1.8%) Total Retail Organized (4.6%) Total Retail Organized (11%) USD Bn 194 3.5 300 14 527 58 INR Cr 8,25,000 14,850 12,78,100 59,000 22,39,800 2,46,378

Source : Cygnus Research, Images & Technopak Analysis

Growth of Organized retailing is a huge business opportunity

The Fashion Enabler

Share of Categories in Organized Retailing

Source : KSA Technopak

Clothing, Textile & Fashion Accessories take a clear lead in Organized retailing

The Fashion Enabler

Category-wise split of Clothing & Textile Industry

Source : Images F&R Study

Menswear is clearly the leader by value

The Fashion Enabler

…. And Menswear will continue to dominate

Consumption trends in 2015

Source : McKinsey Analysis

The Fashion Enabler

Category pie in Menswear

Source : The Knowledge Company

Formal Wear & Fabric constitute about half the pie. Casual Wear is catching up fast

The Fashion Enabler

Structure of the Indian Menswear Market

Source : Images F&R Study

Louis Vuitton, Chanel, Gucci, Zegna, dunhill, Escada Nautica, Lacoste, Manzoni, Gant, Espirit, Tommy, Stephens Brothers Louis Philippe, Wills Lifestyle, Van Heusen, Raymonds, Zodiac, Reid & Taylor Peter England, Koutons, Excalibre, Belmonte Unbranded 1,500 Cr. (YOY 36%) Regional Brands Total Menswear Market is INR 43,300 Cr. YOY Growth % reflects Value growth Figures in brackets are price per shirt in INR

?

Lower Mass Market (Upto 250) Luxury (5000+) Super Premium (3000-5000) Premium (1200-3000) Mid Price (600-1200) Economy (250-600) Lower Mass Market (Upto 500)

6800 Cr. (YOY 24%) 8800 Cr.. (YOY 17 %) 8100 Cr.. (YOY 11 %) 18100 Cr. (YOY 7 %)

Lower Mass Market (Upto 250)

The Fashion Enabler

The Global Luxury Fashion brands Market (USD 80 Bn.)

Asia 37% Europe 35% Others 4% US 24%

Source : The Cult of The Luxury Brand

The Fashion Enabler

The Asian Contribution ( USD 29.6 Bn.)

Source : The Cult of The Luxury Brand

Indian Market = USD 296 Mn. Or INR1258 Cr.

The Fashion Enabler

Evolution of the Luxury Market (Asia)

SUBJUGATION

• Authoritarian

rule

• Poverty &

Deprivation START OF MONEY

• Economic

growth

• Masses buy

white goods

• Elite start

buying Luxe SHOW OFF

• Acquire

symbols of wealth

• Display

economic status FIT IN

• Larger scale

adoption of Luxe

• Fuelled by

need to conform WAY OF LIFE

• Locked into

Luxe habit

• Confident,

discerning buyers

SOURCE : The Cult of Luxury Brand, Industry estimates

India China HK/S’pore Japan 0 – 5 Years 6 – 10 years 11– 20 years

Indian growth Estimates

In the next 5 years, Indian market is projected to grow around 10 times its current size

The Fashion Enabler

Section 5 : Looking Ahead (Future Plans)

The Fashion Enabler

• 1. Additions to our EBO Portfolio

SKNL BRANDS

New Brands Being Launched in Garments by SKNL

Premium Formalwear Premium Casualwear

NON-SKNL BRANDS

New Brands seeking BHRL as a Pan-India Retail Partner

Leading MNC based in India (for a Youth Brand) International Luxury Brands

The Fashion Enabler

• 2. Introduction of the JV

The Fashion Enabler

Age Bracket % Population 0 ‐17 years 40.1 % 18‐35 years 30.2 % 36‐49 years 17.1 % 50 years + 12.6 %

Analyzing The Indian Population

• Fashion

Conscious

• Propensity to

spend

• Decision makers
• Key Influencers

The Fashion Enabler

Developing the Business Proposition

Fast Fashion (Global) Affordable Price Attractive Locations Family Store Total Wardrobe Solution

Core Target (18 – 35 yrs)

• College student
• Working singles
• Working married

no kids

• Working married

very young kids

The Proposition

Large stores of 8-10,000 Sq.ft.

The Fashion Enabler

Aspirational Position in Value Priced Fashion Apparel

Luxury

Super - Premium

Premium Mid-Price Economy Unbranded

Affordable Price Fashion Products Quality

Family Store…Core Target Segment 18 – 35 years

At Indian Prices Italian Fast Fashion

The Fashion Enabler

Our Partner Oviesse –The Leader in Italian Fast Fashion

• Part of Gruppo Coin, Italy’s leading fashion retailer with sales of
• ver 1.1 billion Euros
• Oviesse, the benchmark in Italian Fast Fashion

Over 11 million customers in Italy every year Over 100 million garments sold every year Sales of over 820 million Euros

• A favorite with Italian shoppers

9% of the share of the wallet of Italian Consumers 1in every 5 Italians shop at Oviesse every year 1 in every 3 Italian Kids wear Oviesse apparel

• Spreading beyond Italy

Over 340 stores in Italy & abroad

The Fashion Enabler

The Business Structure

BRANDHOUSE RETAILS LIMITED Master Franchise

SKNL Brands Other Premium / Super-Premium Brands

Joint Venture Subsidiary

Luxury Brands Oviesse Joint Venture

The Fashion Enabler

JOINT VENTURE

• Trend Forecasting
• Design & Development
• Manufacturing/ Sourcing
• Distribution & Logistics
• Brand Building
• Retail Stores

Margin = MRP - Cost

Consumer

The Business Model Sell @ MRP

62.5 % 37.5 %

The Fashion Enabler

Thank You