Mumbai: Flagship company of the Rs2,000-crore Ahmedabad-based Lalbhai group, Arvind Mills, has announced a business transformation that places a stronger retail focus for its branded apparel from being a pure fabric and apparel maker. It has also announced a new corporate identity renaming the world's second largest denim maker and owner of popular apparel brands, to Arvind Ltd.
The company says the image makeover would reflect a strong diversified business group with a focus on branded apparel and apparel retail.
Sanjay Lalbhai, chairman and managing director of Arvind Ltd, says the company will emerge a billion-dollar enterprise by 2009-10 and to do so it wants to get closer to the customer with a new portfolio of fabrics and designs. "We will soon be in newer markets with our fabric portfolio that will include protective and functional fibres," Lalabhai says.
Accordingly, the company has revamped its strategy to create a more customer-oriented business with a deliberate focus on shifting to the customer segment with a stronger presence in the own-brand retail sector taking its apparel and specialty fabrics direct to the customer, all aimed at growing to become the largest apparel brand in the country. The company is developing a direct retailing initiative for its fabrics range to establish a direct reach to premium customers. In the industrial segment, it will focus on the performance wear category for work wear and industrial application fabrics.
In the apparel segment Arvind will focus on enhancing its own brands as well as growing the global brands through partnerships. The company already owns strong domestic brands like Flying Machine, Newport, Excalibur and Ruf & Tuf and is an international licenses of Lee, Wrangler, Arrow and Tommy Hilfiger. Arvind has set a 40-per cent cumulative annual growth rate for its own brands and for the licenced brands.
Lalabhai says the the company will drive new growth with a triple strategy - rework its fabric portfolio to include both performance and protective fibres; transform itself from a pure fabric and apparel maker to a diversified business group across the textile value chain with a focus on branded apparel and; a major boost to its retail business by pushing aggressively into tier II and tier III cities.
This will be followed by the emergence of large format stores in metros and a portfolio of private labels. The apparel retail business will focus on brands that are a bridge to luxury brands and and value retail, which will be marketed through its retail format stores under the Megamart brand.
Arvind plans set up 250 small format stores by 2012 and 30 large outlets by 2012 under its retail brand Megamart, from which it has set a revenue target of Rs1,000 crore in three years.
The company also plans to raise Rs700 crore over the next three years from internal accruals from the fabrics division, infusion from promoters and sale of non-core assets to retire existing debt.
Other companies of the Lalabhai group include The Arvind Products Limited, Atul Limited, Amol Dicalite Limited and Anup Engineering Limited.