CorporateFuture Group forays into lingerie, eyes more private labels
The Future Group is foraying into the lingerie segment, with its own new brand, ‘Mohena’, as part of an aim to launch more private labels.
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Kishore Biyani, CEO, told Business Standard, “We are foraying into the lingerie and nightwear segment, targeting the mass market. So, Mohena starts from Rs 295. We are piloting the product in Kolkata currently and will be rolling it out soon across our stores nationally.”
The private labels will be available as shop-in-shops at the Group’s existing outlets.
Future Group is expanding its private labels in various categories, with plans to launch more products in new segments, such as toothpaste, as part of a plan to become a Rs 25,000 crore conglomerate by 2013-14, up from Rs 10,000 crore now. Currently, private labels contribute around 30 per cent of its sales in fast-moving consumer goods (FMCG) and 25 per cent in personal care in the Group’s major formats, including Pantaloons and Big Bazaar.
“We are also launching our own toothpaste under the brand name ‘Sach’,” Biyani added. Future Group has recently launched soups and noodles under a private label, ‘Tasty Treat’.
LOOKING AHEAD
* Future Brands is aiming at Rs 750 crore from its private labels this year, up from the Rs 660 crore in 2008-09
* Private labels contribute around 30 per cent to Future Group’s sales in FMCG and 25 per cent in personal care in the Group’s major formats
* Future is expanding its private labels, with plans to launch more products in new segments
* Plans to become a Rs 25,000 crore conglomerate by 2013-14, from Rs 10,000 crore now
* Future Group’s private labels are managed by Future Brands, the brand development and marketing subsidiary
* Future Group’s trademark brands include 12 apparel, four FMCG and two household product labels.
Private labels are brands owned by a retailer and not by a manufacturer, and production of these are usually outsourced. Globally, private labels contribute 17 per cent of retail sales, with a yearly growth of 5 per cent, said a KPMG study. International retailers like Wal-Mart of the USA and Tesco of the UK have 40 per cent and 55 per cent own-label brands’ in their stores, respectively. In India, the private-label market is expected to touch a value size of Rs 6,500 crore by 2010-11.
Future Group’s private labels are managed by Future Brands, the brand development and marketing subsidiary. Future Brands, which owns 18 trademarks in segments like apparel, FMCG and consumer electronics, is aiming to achieve a turnover of Rs 750 crore from private labels this financial year, up from the Rs 660 crore in 2008-09, a growth rate of 14 per cent. Future Group’s trademark brands include 12 apparel, four FMCG and two household product labels.
“The lingerie business is not new for us. We earlier had a 50:50 joint venture with Paris-based fashion lingerie retailer, Etam,” Biyani said.
But, as part of cost-cutting, Etam withdrew its partnership in India (through Future Group) earlier this year, and restricted its lingerie and clothing brand to certain markets like France and China. Besides, Etam was not willing to scale down its prices for the Indian market and wanted a super-premium positioning here, something that did not fit the Future Group’s clientele.
However, the less than two-year-old venture with Etam recorded a Rs 18-crore turnover in 2008. It was formed to develop Etam’s lingerie and ready-to-wear businesses, drawing on the experience of Future Group. The company had set up 14 exclusive Etam branded stores and another 37 shop-in-shops across the country.
According to analyst reports, the global women’s innerwear market is estimated to be worth $30 billion, with a projected growth rate of 9 per cent over the next four years. Although the market for women’s innerwear has an ever-increasing demand, much potential lies in Western Europe and North America, which together constitute 65 per cent of the global market. Asian countries like India and China are emerging as prospective markets, attracting international brands. Here, merchandise would be sold in more quantities at lower prices. The market is now driven by brands that come up with innovative products. Renowned brands such as Calvin Klein, Lejaby, Rosy, Lise Carmel, and Victoria’s Secret dominate the market. For Future Group, Mohena stands for youth and relaxation.