Arvind Brands' Competitive Position in the Indian Branded Apparel Market

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Case Details:

Case Code : MKTG109
Case Length : 16 Pages
Period : -
Pub Date : 2005
Teaching Note :Not Available
Organization : Arvind Mills
Industry : Branded Apparel Industry
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

He added, "Newport is uniquely placed to lead this style revolution. It's a brand that understands youth fashion. The new campaign is designed to showcase Newport's strong sense of style ..."⁵. Arvind planned to expand the retail presence of Newport jeans, from 1,200 outlets across 480 towns in May 2005 to 3,000 outlets covering 800 towns by March 2006.

Similarly, Ruf n Tuf- the entry-level jeans brand, entered into an exclusive distribution arrangement with Big Bazaar⁶. Arvind extended its market development strategy to its mid-priced formalwear Excalibur as well. It planned to increase the retail presence of this brand from 1,200 stores in May 2005 to 1,800 stores in March 2006.

Arvind followed a selective distribution approach in the case of its international labels such as Arrow, Lee, Tommy Hilfiger and Wrangler. According to an industry estimate, in 2003, the tailored clothes business was valued at around Rs.400 billion, and Arvind's strategy was to convert a significant part of this market into market for ready-mades.

"The idea lies in increasing distribution and penetration. Zero excise duty on mass apparels and economies of scale through its completely integrated business gave Arvind the competitive edge against other players,"⁷ said Mehta. Arvind set a turnover target of Rs.4.35 billion by March 2006. The company closed the financial year 2004-05 at Rs.3.50 billion.

The Branded Apparel Industry

With the multi-fiber agreement (Refer Exhibit I) getting phased out, the year 2005 has been a landmark year for textiles. As a result of these developments, international trade in textiles is likely to see healthy growth. The introduction of VAT and the growth of organized retail industry are also likely to push up growth in the textiles and apparel sector domestically too. In the late 1980s, the use of readymade garments had not permeated into all sections of the Indian market. Traditionally, Indians preferred dresses stitched by local tailors, who catered exclusively to local demand.

The growth in fashion consciousness during the 1980s and the convenience offered by ready-to-wear garments contributed to the development of the branded apparel industry in India during the decade. Other factors which contributed to its growth were greater purchasing power in the hands of the youth, access to fashion trends outside the country, and the superior quality of fabrics...

Excerpts >>

5] "Saif Ali Khan is new brand ambassador," www.indiantelevision.com, April 07, 2005.

6] Big bazaar is a hypermarket discount store chain promoted by Pantaloon Retail (India) Limited.

7] Nirmal D.Menon, "Arvind Brands plans retail push," Business Line, May 03, 2005.