We interacted with the Management of ARVIND Ltd and came out extremely positive on their approach and vision for brands and retail expansion plans in India.
GAP is a leading specialty brand retailer, with a global turnover of USD16.1b. It began operations in 1969. It is now available in 90 countries through 3,100 company-operated stores, over 350 franchised stores, and e-commerce sites GAP has tied up with ARVND to open 40-50 stores by FY18. The first store should be operational by May 2015, with the launch of the GAP Summer 2015 collection. ARVND plans an initial footprint of 15-20 cities across India for GAP stores. It will look at opportunities to penetrate beyond tier-1 cities/towns over the long term.
GAP is popular for its khakis, jeans, and t-shirts, selling under brands like GAP, Banana Republic, Old Navy, Piperlime, Athleta and Intermix. Each store, spread across 8,000-10,000sf, will be located in the most prominent location of the city. The look-and-feel of the stores will be similar to global GAP stores. Each store will need an investment of ~INR100m for fixtures and other related capex, excluding working capital requirement.
ARVND will sell GAP’s global merchandise at global prices. GAP is present across menswear, women’s wear, and most importantly, it is very strong in kids and infant wear. Its product mix is spread across basic, fashion, modern, and heritage categories. ARVND will also have rights to sell GAP products through e-commerce platforms, a huge opportunity over the long term. The management believes that GAP can generate annual revenue of INR10b in the next five years.
Globally, GAP store launches have been huge impact events and the management indicated that India would be no exception. Given its iconic brand value, GAP attracts huge footfalls, especially among the youth. ARVND is planning innovative brand awareness campaigns like outdoor bus advertising, exciting store formats in line with global GAP stores to provide great consumer experience.
ARVIND Ltd has also tied up with The Children’s Place Specialty Retailer from the US to introduce stores in India.