Colorplus is not for sale, on the prowl for acquisitions
21 October 2000
Does Mr Mudaliar agree with the Rs 35-crore figure stated in the news report as Colorplus' brand value?
Saying that it has been grossly undervalued, he adds, "Brand valuations are sacrosanct for those who have taken money from venture capital and for those who want to sell off their brands. We don't figure in both the categories. Our focus is always on the bottom line growth and not the top line aiming for higher brand valuations." While the company has got an independent agency to do a brand valuation, he refused to divulge the value.
However, what Mr Mudaliar agrees with, is the fact that Colorplus Fashions, like other players in the industry, is definitely looking out for brand acquisitions.
Interestingly, all the majors in the Rs 6,400-crore ready-to-wear industry will tell you that many brands -- of course, barring theirs -- are up for sale and they are bidding their time to lap up those brands that sync with their existing product portfolio.
Be that as it may, Colorplus Fashions, true to its fashion of being first in the country in several categories, is all set to launch garments made out of Supima cotton, a special cotton variety grown only in some parts of USA. It may be mentioned that the company is credited with many firsts -- introduction of pre-wash, wrinkle-free, golf-ball-wash, stain- and wrinkle-free, stretchable and celanese acetate fibre garments.
Further, in line with the competitors moves, Colorplus Fashions is entering the ladies garment segment. "We will be mainly in western wear category," says Mr Bhatia. However, unlike some of its competitors, Colorplus Fashions will launch its ladies wear under the existing Colorplus brand.
"First we will exhaust the market opportunities for our brand and before we think about launching a new brand. Our various products are well-differentiated," explains Mr Mudaliar.
Supplementing him is Mr Bhatia. "The women's range will be wide and deep like our men's range. We are now test-marketing to understand style and colour preferences of ladies." According to him, 80 per cent of the women's western wear is accounted for by tops.
Interestingly companies like Indus League, launched its ladies wear under the Scullers tag, while Pantaloon Retail (India) Ltd, created two exclusive ladies wear brands viz, Annabelle (western office / casual wear), Srishti (salwar kameez, readymade blouse).
Apart from cotton garments, Colorplus Fashions has a good portfolio of winter wear and also markets men's accessories like belts, caps, socks, and hats. On the anvil are some more leather products like wallets, passport holders, key chains and silk ties.
According to Mr Mudaliar, accessories contribute around 10 per cent of the company's turnover of Rs 22 crore. The company also exports to Ireland and Middle East countries and earns around Rs 3 crore revenue.
The other thrust area for Colorplus Fashions, according to Mr Bhatia, is the sportswear. While choosing golf as the company's preferred sport with which the brand is to be associated ("It syncs with our brand positioning and target clientele", says Mr Mudaliar) the company is also involved in other high-profile games like bowling and polo.
The company sponsored the recently concluded National Bowling Championship and will be sponsoring the Indian polo team that will tour Australia. "Bowling is now becoming part of human resource training modules for corporate executives. Similarly polo is played by the young upper middle-class," Mr Mudaliar explains the rationale for choosing these games as the vehicle for promoting his Colorplus brand.
The company has committed to invest 6 per cent of its turnover in building the brand by sponsoring various sports. While Mr Mudaliar and Mr Bhatia are cagey about their ad budget, it is learnt that the company invests around Rs 6 crore in media advertisements to
build its brand.
Last, the management has not forgotten the need for expanding its reach. Strengthening the existing brand and introduction of newer ones aside, the company is now concentrating on expanding its reach throughout the country. Presently Colorplus brand is available in 90 outlets of which 5 are company-owned and 11 are franchisee-owned outlets.