COMPANY PROFILE MEGA MART

COMPANY PROFILE
INTRODUCTION TO ARVIND GROUP AND ARVIND BRAND LTD LAL BHAI GROUP- TheLalBhai Group has various businesses under the following divisions: Textile/Yarns/Garments The Arvind Mills Limited The Arvind Products Limited

Arvind Brands Limited

Arvind Brands Limited is further divided into; Others: Atul Limited AmolDicalite Limited Anup Engineering Limited Arvind Fashion Limited Arvind Clothing Limited

ARVIND MILLS LIMITED The Arvind Mills was, set up with the pioneering effort of the Lalbhai brothers in 1931. With the best of the technology and business acumen, Arvind has become a true Indian multinational, having chosen to invest strategically, where demand has been high and quality required has been superlative. Today, the Arvind Mills Limited is the flagship company of Rs.20 billion(US$ 500 million) Lalbhai Group. Arvind Mills has set the pace for changing global customer demand for textiles and has focused its attention on select core products. Such a focus has enabled the company to play a dominant role in the global textile arena. With its presence across the textile value chain, the company endeavors to be a one - stop shop for leading garment brands. For vision and technology has brought Arvind to be one of the top three producers of Denim in the world, and one its way to become global textile Conglomerate. Arvind is already making its presence felt in Shirtings, Knits and Khakis fabrics apart from being all set to create ripples in the ready to wear garments world over.

ARVIND PRODUCTS LIMITED The company is the subsidiary to the Arvind Mills Limited. The principal business segments of the company include manufacturing and marketing of the voiles fabrics, Bottom weight

fabric(Khakis) and yarns. The company operates through its divisions viz: Arvind intex (with both ring and open end yarn manufacturing under one roof), and Ankur textile. ARVIND BRANDS LIMITED Arvind Brands a group of company, manage various brands owned by Arvind. These include Flying Machine, Newport and Ruff &Tuf in jeans and Excalibur in shirt. The company services entire Domestic market in India apart from exports in the neighboring countries. ATUL LIMITED The 600cr Atul Products, set up in1947, is one of the Asias largest and greenest chemical complexes. The company has grown to become Indias largest dyestuffs manufacturer, making and marketing over 250 varieties of chemicals and intermediates, from basic commodity chemicals to specialty intermediates required for the agro chemical, defense, dyestuffs, leather, paper, pharmaceuticals and textile industries. Atul exports to more than 50 countries. AMOL DECALITE LIMITED A group company with the business ranging from Textile clothing to Filter Aids to Perlites Products. ANUP ENGINEERING LIMITED It is one of the leading engineering companies engaged in manufacturing process equipment for Chemicals, Refineries, Petrochemicals, Pharmaceuticals, Fertilizers, Drugs and Allied Industries. The company is equipped with the Laboratory to carry out various destructive and nondestructive tests apart from an independent quality control department. The company undertakes design and manufacture of equipments to meet the requirement of the national and international codes such as ASNME, BS-5500, TEMA, EJMA, and IS2825 etc. for design,manufacturing and testing apart from any other specific quality requirements specified by the customer. Equipment and components are manufactured out of carbon steel, stainless steel, monel, Inconel, cupronickel, aluminum alloys etc.

ARVIND BRANDS LIMITED The Group Company: Arvind Mills Limited

Arvind Brands Limited is a member of the Lalbhai Group which owns Arvind Mills Limited. Arvind Mills today is a US$ 600 million company and is the world second largest denim manufacturer. The group was founded in 1931 and its core business is textile and apparel.

Manufacturer and Marketing of Apparel

Arvind Brands Limited manufactures, markets, distributes and retail in India, Nepal, Bangladesh, Sri Lanka and Middle East. It has a portfolio of eight brands which includes four international brands. Premium Brands Arrow: Under license from Phillipe Van Heusan, USA The above brands cater to the premium end of the market. Mass Brands Besides the above Arvind also has a portfolio of home grown national brands, which cater to the mass market. These include Newport University, Flying Machine, Ruf n Tuf, Bay Island and Excalibur. These brands dominate their segments in the Indian Market. Company Financials Arvind brands is one of the largest apparel manufacturing and marketing company in India with overall business size of USD 100 million at whole sale price.

Company Details

Arvind Brands Ltd. is one of the fastest growing apparel companies in India. The brand portfolio is diverse and aimed at offering the best value for each customer segment. The licensed brand, Arrow is the market leader in the premium Mens Formal Wear. Milestone Arvind Mills was established in 1931. It was founded by Kasturbhai LalBhai, one of the leading families of Ahmedabad. 1931 Arvind Mills Ltd. Is incorporated with share capital Rs. 25,25,000 ($55,000) in Ahmedabad. Products manufactured are dhoties, Sarees, mulls, dorias, crepes, shirtings, coatings, printed lawns and voiles cambrics, twills gaberdine etc. 1987 The company took up a modernization programmed to triple the production of denim cloth and to produce double yarn fabrics for exports. The new product groups identified were the indigo dyed blue denim, high quality two-ply fabrics for exports, and special products such as buttasarees, full voils and dhoties. 1991 Arvind reached 100 million meters of denim per year, becoming the fourth largest producer of denim in the world. 1992 The company increased the production of denim cloth by 23,000 tons per day by modernizing the plant located at Khatraj of Ankur Textiles. 1993 The company proposed to expand the denim manufacturing capacity by 850000 meters per annum. The company also proposed to set up a new composite mill for producing annually 120 lakh meters of high quality shirting fabrics to be marketed in the domestic as well as international markets. This year also saw the inception of Arvind Brands limited with the launch of brand Arrow in India. 1994 The companys operations were divided into 3 units viz. Textile Division, Telecom Division and the Garments Division. 1995 The performance of textile division was significantly affected due to an unprecedented rise in cost of cotton.

Garment division launched ready to stitch jeans pack under the brand Ruf&Tuf and it also launched a mass market jeans brand by the name of NewPort. Lee also came into the portfolio of Arvind Brands as a licensee brand.

1997 The marketing and distribution network of NewPort brand was strengthened and they relaunched Flying Machine while Ruggers was Strengthened. The company reported a fire in the goods godown&folding packing department in Naroda Road unit of the company. Arvind Mills set up the anti-piracy cell for the first time in India to curb large scale counterfeiting of their highly successful brands Ruf&Tuf and NewPort jeans. Arvind Mills adopts the franchisee system for the manufacture and distribution of Ruf&Tuf. Arvind Fashions doubles its capacity in the state-of-the-art manufacturing facility in Bangalore to produce Lee jeans. 1998 Arvind Mills emerges as the worlds third largest manufacturer of Denim. Arvind Mils goes live with SAP R/3 ERP package in April 1998 in their new manufacturing units. 1999 Arvind Mills sets a two-month deadline for hiving off its garment division into a separate company and sale of its real estate in Delhi. 2000 CRISIL downgrades the debenture issues of Arvind, indicating that the instruments were in default. Wrangler was re-launched in India by Arvind Brands Ltd.

2001 Arvind Mills defaults on a $125 million floating rate note issue and puts forward a debt restructuring proposal that could significantly reduce its debt burden and sharply improve its financial health. Arvind Mills posts a net loss of Rs. 44.59 crore for the quarter ended September 30, 2001. 2003 For the fourth quarter, Arvind Mills witnesses 280% growth in the net profit

Arvind Mills Ltd is assigned a P1+ rating by CRISIL, which indicates a very strong rating for their commercial paper. 2004 Company turns itself around showing remarkable improvement in financial performance. 2005 For the fourth quarter in a row, Arvind Mills has managed to post a profit growth in excess of 80%. 2006 Arvind Mills decides to buy entire stake in Arvind Brands from ICICI Ventures 2007 Arvind Brands gets the license for Cherokee. 2008 Arvind Brands opened its first MegaMart Outlet Centre, spread over 40,000 sq. ft .in Chennai. MegaMart goes beyond apparel retailing; adds new categories. Arvind Mills implements Oracle ERP for its retail outlets. Arvind Mills changes name to Arvind.

MEGAMART INTRODUCTION
A venture of the prestigious Arvind Mills Ltd., MegaMart set up in 1996, and MegaMart is the pioneer in the value retailing, branded apparel segment in India. MegaMart arrived on the scene at a time when multi-brand discount outlets were still an unheard of phenomenon and changed the rules of the retailing business in India. By keeping overheads and other costs to a bare minimum, it was able to pass on maximum discounts to customers. Inspite of being a brand that passes on the cost benefits of low overheads to the consumer. MegaMart does indeed boast of providing an excellent shopping experience. The brand believes that no no frills ought not to come at the cost of great ambience. Air conditioning, Customerfriendly store layouts and well-designed interiors contribute to this ambience. Add this to some of the best deals around and you have a shopping experience that is truly unparalleled. MegaMart is now at your neighborhood, the MegaMart store network is grown around the country in 26 cities with 84 stores and growing faster, almost 2 stores per month. The fashion & trend change is so frequent; there were lot of surplus stock each year for Arvind Brands. By having a lot of left over the company were having lot of analysis over how to replace the old stock from shelves without loss. Then there arise the concept of Factory Sale. Arvind was the first to introduce the factory sale. That concept also becomes highly profitable for the company and they thought about a new channel. MM become its own and tagged as a value store. First Store was opened in 1996 Dec. at Mahadevpura in Bangalore. The stock or lot available in MegaMart was one year old. So to maintain trend & fashion, MegaMart introduced Private Brands. The brands like AuburnHill, Elitus, Colt, Liesha etc is owned by MegaMart & exclusively available in MegaMart. Now the Brands by the MegaMart cover almost all categories & the profit making pie of the company. OBJECTIVE To capture a significant wallet-share of consumer who spends on clothing and luggage. We will aim to offer value to the customer by bringing together competitive prices with an irresistible

variety where the customer would have the luxury of shopping from a diverse product range in a luxury ambience. We would be focusing at offering affordable fashion with superior quality fabrics. We would be also looking at premium in-house brands to build a strong business in our MegaMart with fashion apparel, accessories and luggage. VISION To be the most loved Retailer. Mission Customer first: We will do everything possible to consistently delight our customers. Value first: We Will always provide unbeatable value in everything we offer. MegaMart First: We will reach-out to every Indian home. Service Mission We exist only because of our Customers.

ORGANISATION STRUCTURE MEGA MART

ORGANISATION STRUCTURE OF ARVIND MEGAMART

ORGANISATION STRUCTURE OF ARVIND BRAND

Business Head Arrow Business Head Excalibur & Flying Machine Business Head NewPort & Ruf N Tuf Business Head MegaMart CEO VP Finanace

VP HR

GM Sales

GM SCM

MEGAMART

HEAD HR HEAD MARKETING HEAD FINANCE OPERATIONAL HEAD - SF OPERATIONAL HEAD - LF CEO IT HEAD HEAD PRIVATE BRANDS V P PARTNER BRANDS GM RETAIL

HEAD PROJECT

HEAD SCM

STRUCTURE OF HUMAN RESOURCE DEPARTMENT

HEAD HR
MANAGER HR ASST MANAGER HR EXECUTIVES

STRUCTURE OF FINANCE DEPARTMENT

HEAD FINANCE

MANAGER FINANCE

HEAD MIS

COMMERCIAL MANAGER

HEAD TREASURY

FINANCE EXECUTIVE

COMMERCIAL OFFICER

CASHIER

BANKING

FINANCE OFFER

STRUCTURE OF SUPPLY CHAIN MANAGEMENT DEPARTMENT

Sr. Manager SCM

Manager SCM

Asst Manager Ware House

Manager Logistic

Retail Planner

Asst Manager SCM

Executive WareHouse

Distribution Officer

Officer Retail Planner

Executive

Officer WareHouse

STRUCTURE OF IT DEPARTMENT

IT Head

Asst. Manager IT

STRUCTURE OF MARKETING DEPARTMENT

HEAD MARKETING

MANAGER MARKETING

ASST. MANAGER MARKETING OPERATIONS SMALL FORMAT

OPERATION HEAD - SF

SR RETAIL MANAGER

RETAIL MANAGER

AREA SALES MANAGER

ASST. MANAGER VM

AREA SALES MANAGER

SHOWROOM MANAGER

OPERATIONS LARGE FORMAT

OPERATION HEAD -LF

MANAGER OPERATIONS

MALL HEAD

ASST MALL HEAD

PARTNER BRANDS

VP PARTNER BRAND

EXECUTIVE BRAND RELATIONS

MANAGER KEY ACCOUNTS

ASST. MANAGER KEY ACCOUNTS

RETAIL PLANNER

PRIVATE BRANDS

VP PRIVATE BRANDS

HEAD DESIGN

BRAND HEAD

HEAD NON - APPARELS

OPERATION FORMAT MEGA MART

OPERATIONS SMALL FORMAT Concept

The small format store is a kind of small store only. The concept is like the customer can drop in at any time & can do a quick purchase. Small format is a store where the total sq. feet of those stores lie between 1500 & 5000. But it doesnt have the look of a typical discount store. It has got a luxury ambience to offer the customer a unique experience. The stores are given certain standards to follow in which their performance is measured. The performance matrices are PSPD Per Square Feet Per Day Formula: (Sales Per Month / Square Feet Area)/No of Days ATV Average Transaction Value Formula: Total Sales Per Day / Number of Bills GM Rof Gross Margin Returns on Footage Formula: Gross Margin / Square Feet Area Conversion Rate Formula: Number of Bills / Total Number of Walk-ins The product line available in a MegaMart Small Format store is: Mens Wear Womens Wear Youth Kids Luggage Accessories

 Footwear Market Place

Statistics The MegaMart opened first small format store in 1995 at Mahadevapura, Bangalore. Currently, there are 84 stores operating in the small format. In short term plan the company is Planning to set-up 123 small stores by the end of financial year 2010-2011. In long term the company is planning to open 250 small format stores by 2012. OPERATIONS- LARGE FORMAT Concept Another concept that evolved after the small formats huge success was large formats. This store is very huge comparing to the small format one; basically it is a mall type. So there will be lot of merchandisers other than MegaMarts. The number of the partner brands will outnumber the inhouse brands & other licensed ones. Objective By the large format store the company is aiming to tap the potential of retail sector in India. By this all the Private Labels of MegaMart will get more awareness among the customers. It will help MegaMart in establishing their in-house brands. Process First the business development team will identify the place or site to put up the store. Then Projects team will make the mall ready for merchandising. Here there comes a lot other merchandisers and brands in Large Format in the space allotted for them. The space allocation will be done by the Partner Brand Team. A Large Format stores the sq. will be more than 40000 sq. feet. In a LF the other retailers are also given space for merchandising in a rental or profit sharing basis. They are more independent than Small Format.

Statistics The first Large Format store opened at Chennai in 2008 January, the second one came up in Pune in July. The company is planning to set up 6 Large Format store by the end of 2010-2011 financial Year.

PARTNER BRANDS Partner brands are the brands that are offered in the MegaMart outlet other than the in house brands or private labels. The MegaMart will not be having a complete control over the stocks. They partner brands do business in a consignment basis or profit sharing basis. Concept The customer in the market for apparels is mainly divided in to 4. They are Brand Loyal, Brand Aware, Value Seeker and Bargain-Hunter. The Brand Loyal will consist of a small part who will only buy a particular brand for them. They are very loyal to their brand. For then, there will be exclusive outlets to have a shopping experience. The second one is a Brand Aware, who are conscious of all brands in the market and want the material to be a branded one, not of a particular brand. Next one is a value seeker, who is a sensible one. He doesnt look whether the material is branded or not. He will only check the quality of fabric. Whether it is giving more value to what he is paying. The last one is a Bargain-Hunter. He is a shrewd one. He dont want to know the price or brands of the product, he just want to get that particular material which he like at the lowest price. He will negotiate with the seller to the maximum discount for the product. MegaMart is focusing on all of the above customers. If they target a particular group, the segmentation will be restricted. So here they are doing a mass segmentation by having a lot of reputed in-house brands and also private labels. But it is not enough to pull the customer to the store. All the outside brands that are having stalls inside MegaMart are called Partner Brands. By the partner brands in the stores, more number of customers will be coming to store. There are many advantages by the Partner Brands in MegaMart Store. There are

 Lot of customer means lot of business to the store, by that lot of commission or profit. Customer will come for the branded stuff will also find the private labels, so private labels get more awareness among the customer. The chances of switching from other brands to private brands of MegaMart will be there. This is good for long-term goals of MegaMart for establishing its private labels.

PRIVATE BRANDS Introduction The private brands are the in-house or own brands of MegaMart. The Brands like Auburn hill, Ruggers, Elitus, Leisha, Colt are the private brands of MegaMart. The Private labels are designed, developed and brought in to the market by MegaMart. Objective Design, Develop & introduce a saleable product at the right time and at right price point. Functions Private Brand Team works by a sequential procedure. There are different departments working as a process. The departments are:1. Product Development Team 2. Design Team 3. Category Team 4. Quality Check Product Development: Product Development Team mainly do the innovation Part. They always are on the innovative side by finding out which all designs has come recently. What will be the future trend or fashion etc..? So analyzing all this the team will come up with a new product i.e. completely new type of

product. For example in case of apparels, a new variety of fabric or material. The product development does: Vendor Development Product Development Price Negotiation

Designing After the product is being identified by the product development team the design team will create a pattern for it. They will give that material a particular pattern or color or stitching. It is not that only new products are designed by design team. They will also design the existing product for merchandising. Category After designing they will approach the category team. The category team has three functions. First is to sourcing the desired products and buying it. It is to buy or negotiating with vendor to do it. The next is to do the retail planning. Retail Planning is to acquire the goods in a correct proportion. It includes size wise, brand wise, category wise etc. They only plan how much to buy & what amount we can sell. Quality If the products are given quotations to vendors, it needs to be checked at regular intervals. The quality team will do audit for ensuring the quality of material. They do different types of audit. Factory Audit Inline Audit Final Audit

In factory audit they look the factory efficiencies or standards, whether the entire requirement to produce the material is satisfied there. In between the production process if there is some deviation then it will affect the whole lot. To avoid this they do inline audit. Final audit is the checking of quality at the time of delivery by the vendors.