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GROWTH Needed: XXL Plans As competition closes in, ColorPlus feels the need to think big. By Nitya Varadarajan
"It's up for sale."
Still, there are reasons why the rumours won't die in a hurry. One, with sales of Rs 35 crore (1999-2000), CP will remain an attractive target (size of men's ready-to-wear market: Rs 2,720 crore). CEO Kailash Bhatia admits that the company alone has a valuation exercise underway, but refuses to elaborate. ''Valuation is about one-upmanship; it means nothing to the customer,'' is his terse response. And two, while CP has managed to build a strong brand on the back of its product-focus, other companies, like Madura Garments are now trying the same thing and targeting the same segment. For instance, in September, 2000, Madura Garments introduced the Tencel range in the Allen Solly portfolio. And Indus League's Scullers brand (priced lower than CP), says CEO Sriram Srinivasan, is addressing the 'global mobile customer', the same segment defined by CP. In just six months of operations in 1999-2000, Indus League claims it has achieved a turnover of Rs 26 crore. CP, then, needs to think big: in terms of its product-range and distribution. Bhatia rattles off a series of product-innovations (use of Lyoceall and Celanese Acetate, both new-age fabrics with benefits like better fall and colour retention, for instance). ''Never mind if the rest of the market catches up; we have the first-mover advantage,'' he boasts. CP is also boosting its presence from 90 outlets in 27 cities to 150 outlets in 40 cities by 2002. While the market for the quasi-formal casuals CP makes is growing faster than that for formals, the trend could change. Admits Prakash Nedungadi, President, Madura Garments: ''Casuals grew rapidly, but the segment is reaching maturity. The West is now slowly opting for formals and the same could happen here.'' With five main brands and several sub-brands at his disposal, Nedungadi can hedge his bets. CP is trying to do the same by entering new product categories like leather accessories and ties, and pushing its existing lines in winter wear, women's wear, and travel wear. Mudaliar isn't averse to acquisitions either. Resources shouldn't be a problem: his mentor Viju Mehtani runs the Ambattur Clothing Company (Mudaliar has a stake in ACC; Mehtani in CP), a Rs 400-crore export powerhouse; and with the kind of brand equity it enjoys, CP shouldn't find it too difficult to raise money from the market (something Mudaliar rules out for the immediate future). Whatever ColorPlus chooses to do, however, it needs to do so now, before the colour runs out. |
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The
rumours flew fast and wild. Till, finally, on October 5, the Chennai-based
ColorPlus Fashions (P) Ltd took out an ad in the papers denying the
rumours that the company and its eponymous brand had been sold. If the
media seemed to be devoting more column-cms than that merited by a mere Rs
36-crore transaction (that was the number being thrown around), the reason
was the brand itself and what it had come to symbolise. With its focus on
product benefits and eye-catching advertising, ColorPlus (or CP), had
become, arguably, one of the strongest clothing brands to be launched in
the country in the past decade. So much so that competitors, including
established giants like Madura Garments, Raymond, and Arvind Mills, and a
slew of me-too players like Celebrity Fashions Ltd (Indian Terrain brand),
Mayfair Ltd (Zodiac brand), and Acme Clothing (Provogue brand) tailored
their marketing mix to echo the same product-benefit tune CP was playing.
Rajendra Mudaliar, the 45-year old Founder and Managing Director of the
company, is focused to the point of obsession: ''There will be no
sub-brands. Introducing a sub-brand is against the vision of the company.
And it will kill our 'exclusive' appeal.''