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Punit Agarwal

CEO | 28 Nov 2011

If you look at examples from the world, it’s the Walmarts who call the shots for stock markets in those countries. If they can do it, we can do it as well. We can do wonders if we have patience and the confidence in us. Indian retail is contributing 22 per cent to the GDP, 6 per cent from the employment front. Retail is set to create more employment opportunities than any other. International brands are also looking forward to come into India, so it is the right time to be in this space.

Punit Agarwal is Chief Executive Officer of Promart Retail India Pvt Ltd. Promart was earlier a division of Provogue India and Agarwal acquired the brand in 2011. In his role, Agarwal is responsible for the overall business decisions, logistics and inventory management for the company. His role also includes setting up targets and identifying key markets for growth and sustainability of the business.

India is a deal country and shoppers are always attracted to discounts. But with so many players around, isn’t the consumer already spoilt for choice? Is there a space for more? Playing on the weakness of many and banking on safe strategies, VEMB Lifestyle Pvt Ltd and Apple Group of Companies are embarking on an ambitious plan with Promart, a revolutionary concept in lifestyle retailing, targeting the aspiring generation Y shoppers. Promoted by an enthusiastic and young set of leaders, the group aims to create the next Walmart of India.

In conversation with exchange4media’s Deepika Bhardwaj, Punit Agarwal shares his plans, strategies and faith with which he has embarked on this journey...

Q. VEMB and Apple have taken over Promart from Provogue. What are the financial exchanges? What encouraged you to buy Promart?

I have travelled abroad extensively for my business. Low cost format has been immensely successful in many cities around the world. The idea of starting low cost fashion retail was always on the radar, Promart came as a right opportunity at the right time. We have acquired all the assets and IPs from Provogue for about Rs 10 million.

Q. India already has many players in this space like The Loot, Primus, Megamart, Brand Factory, etc. Some of the old ones have shut shop too. What is your game plan to stay and grow?

You are right. Low cost format was a rage a few years ago. But blinded by immediate growth and betting high on the future, many players increased their overheads like real estate and inventory beyond control. As a result of which they had to shut shop. But, if we take the example of Indigo, it’s a promoter run company, less overheads and more profits. We also plan to keep our overheads minimal, not invest in very high end real estate, not get carried away with large formats, begin small and slowly develop. What we would like to do is change the perception of the consumers, change the thought of the people. Our focus is on markets where fashion is still not there. Getting first hand on stocks, buying it outright, keeping overheads low at the backend will surely lead us on the right path. Apart from that, every new business has its own challenges and we are ready for them.

Q. You have rapid expansion plans over the next three years. Could you share the details and how you plan to take it forward?

If I talk in terms of financial year, we are looking at 17-18 stores by March 2012 with a top line of Rs 60 crore and investments worth Rs 40 crore. By 2013, we would aim at 64 stores+32 shopping stories with a top line of Rs 400 crore and investments touching Rs 150 crore. All these investments will be promoter funded. Debt could also be looked at if required. Our main focus for Promart will remain on Tier 2, 3, 4, 5 cities. Consumers in these cities still wear stitched clothes. Although an aspiration for high-end fashion is there, exposure is very limited. So, we have bigger opportunities there. By 2014, we are hoping that multi-brand retail FDI will be coming in. The model will be rethought entirely at that time. But as of now, we are concentrating on our immediate plans, taking our own calls as this is a promoter-led company.

Q. What is the growth rate of fashion retail in India? What are the factors that encourage you to go on such a big expansion spree?

If you look at examples from the world, it’s the Walmarts who call the shots for stock markets in those countries. If they can do it, we can do it as well. We can do wonders if we have patience and the confidence in us. Indian retail is contributing 22 per cent to the GDP, 6 per cent from the employment front. Retail is set to create more employment opportunities than any other. International brands are also looking forward to come into India, so it is the right time to be in this space.

Q. What will be Promart’s strategy to build itself as a brand in the market?

Our strategy will be two-fold – Treat consumer as king and keep overheads minimal. We would buy outright, provide best quality, get maximum discounts and give it to consumers, which will of course help us in attracting mass consumers. As shared, our expenses will be minimal on real estate and we would rather spend that on giving best bargains to our customers. We would take the BTL route to marketing, along with an e-commerce site. Mobile, print media, and hoardings in cinema halls would be another way to publicise the brands as our target consumers can be easily contacted through these touch points.

Our USP would be great stock. We are adopting the cash and carry model because of which we would get big discounts. We will not take stock on a consignment basis, but will pay upfront as soon as life of stock ends on main shelves and keep all the sizes and colours. We would never keep dead stock.

Q. Who are you partnering with to take your ideas forward?

We have designed everything in-house right now. We have just started with one store. I would want to see the company grow, deliver on its promises and then get into PR and advertising. Once we have a presence of 18 stores, that’s the time I would look at blowing the trumpet.

Q. What will be your marketing budget for the next two years?

There is no fixed plan yet, but yes, we would be spending something like 10-15 per cent of the sales on acquiring new customers. Our focus will, however, remain on getting directly into the hands of consumers and make them like the brand at the point of purchase.

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