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Fashion brand Max eyes 60-65 pc 2-year CAGR

09-December-2011
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Fashion brand Max eyes 60-65 pc 2-year CAGR

Max, the international value fashion brand of the Rs 22,000-crore Landmark Group, which currently has 60 stores with a presence in 33 cities, plans to reach a total of 70 stores by April 2012, expanding its footprint to 35 cities. The brand, with a turnover of close to Rs 400 crore last year, has seen a 60-65 per cent four-year CAGR and is targeting the same rate over the next two years.

Vasanth Kumar, Executive Director, Max, said, “The whole genesis of Max is based on giving an experience to the customer. We bring the latest international fashion from European markets through our parent company based in Dubai. Max at Landmark Group, with a turnover of Rs 2,000-2,500 crore, is the fastest growing brand and the leading player across 15 countries.” The brand has a total of 200 stores worldwide.

Max’s offerings are mainly targeted towards customers in the 22-35 age bracket. For this target segment, the brand keeps introducing new product lines. “Last year, we launched our own innerwear line called ‘Blush’. In the coming summer, we are going to launch our swimwear range and are also beefing up the holiday range. In the ethnic range, we are introducing some more fusion collections. We are also planning to introduce clubwear; we mainly offer daywear.”

The brand’s target customer is the contemporary, new-age family whose aspirations are led by exposure abroad and through the media. “They are open to buying different wardrobes for different occasions. That fits very well with us. Since it is easy on the purse, customers don’t mind buying multiple wardrobes. We have a wide range from apparel to accessories and footwear. The affordable offerings in the Kids’ segment also make it easy for a regular wardrobe change for kids as they grow out of clothes fast and are also becoming more fashion conscious these days.” Around 26-27 per cent of the business comes from the menswear range, 20 per cent from the Western, Ethnic, and Children’s’ wear ranges, and 10 per cent from the accessories and footwear ranges.

Outlook for fashion segment remains bright
Overall, the total market size of the value fashion segment (apparel, accessories, and footwear) is Rs 40,000 crore out of the 1.2 lakh crore apparel market, the segment growing at 8 per cent p.a. The organised sector, where we compete, is expected to grow at 30-35 per cent CAGR mainly due to increasing mall developments. “The outlook for this sector continues to be bright as customers want more value without compromising on their lifestyle. We mainly have stores in malls; standalone stores are unique in some southern markets. The bulk of our sales happen through malls with around 75 per cent of our business coming in from here. Right now, we have 45 stores in malls and 15 standalone stores. Standalone options are limited for us due to limited space in high streets which is a better option as it is a readymade market.”

Elaborating on Max’s USP and marketing strategy, Vasanth remarked, “We have positioned Max as a branded fashion player. We have two types of markets in fashion in India – the premium segment (Lifestyle, Shoppers’ Stop, etc.) and the value segment (hypermarket labels). We are carving out a niche in the area between a premium department store and a value hypermarket store. Other brands in this space are Westside and Pantaloons. The difference between us and the other two is that we are international and we position sharply so that consumption can be driven by us.”

According to Vasanth, sharp pricing and a wide range offered are two key points that will allow them to expand their market share. “While the value fashion market is growing at 8 per cent, we are growing at 60-65 per cent, so the market share will definitely go up because of conversion. We hope to benefit from the increase in organised consumption. Conversion has two aspects – offering fashion at sharp prices and a wide range. Our average price point in winter is Rs 380 and in summer, Rs 340. Moreover, with mix-and-match options in fashion, customers can freshen up their wardrobe without spending too much. The idea is to increase the consumption in the 40,000 crore market rather than increase the market share.”

More emphasis on BTL activations
Max’s creative agency is JWT, while the media mandate is with Mindshare. The retailer has a fixed percentage model, setting aside around 3-4 per cent of their budget for promotions as they want to provide maximum value to their customers otherwise. Generally, brands in the fashion industry spend 12 per cent of their turnover towards promotions.

Vasanth elaborated, “As a concept, we don’t resort to traditional media advertising. We go in more for BTL activations, web initiatives, mall activities, etc. In this segment, we want to give maximum benefit to the consumer by optimising cost and also leveraging the walk-ins which are anyway coming to these locations. Predominantly, ours is the mall model. If we are relevant to the local catch vendor, that is adequate. In malls, there are automatic walk-ins. We are not distributed wide; we are distributed limited. Those markets we do local communication to attract customers and also marketing inside the malls. We also advertise through hoardings and in multiplexes. In every store, visual merchandising is an important aspect that they focus on. We bring in collections four times a year and spend around one-third of our budget towards visual merchandising.”

Max organises events every quarter; this month, they will be held in three Tier II cities. “An important vehicle of brand building for us is events such as the Miss Bangalore event, ‘Fashion Idol’ in colleges, ‘Little Icons’ in schools, ramp shows for children in stores – mainly BTL brand building. We mainly focus on experience since we have a store space of 15,000 sq ft stocking close to 70,000 pieces of merchandise. So, we give a lot of emphasis to visual merchandising and customer service. Word-of-mouth is another route that helps us a lot”, he added.

Over the next year or so, the brand is exploring ways to synergise their current store network into an e-commerce scenario. Vasanth explained, “At present, we don’t have tie-ups with any e-commerce portals. Ours is a full price brand; we promote it as value fashion at affordable prices. In e-commerce portals today, the bulk of the transactions take place at discounted rates, an association that we want to avoid. We are not a logo brand; customers purchase our merchandise because of the range and keen pricing. Moreover, when customers visit our site, we want them to experience Max, so we have to figure out how best to deliver the Max experience to our customers online.”

 

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