Beruflich Dokumente
Kultur Dokumente
Amit Kumar Khetan Gauri Sankar Das Noufal M Basheer Sri Sudha Konatala Sudeep Mohapatra
industry is highly fragmented with unorganized retail taking a huge share The largest player (Aditya Birla Nuovo) in organized retail has a total market share of 0.8%. Largest Single Brand Retail (Reebok)-0.4% market share Focus of the analysis will be exclusively on organized apparel retail
INDUSTRY ANALYSIS
High economies of scale in distribution and advertising in organized apparel retail Low switching costs of changing suppliers-Textile industry is largely labor intensive and highly fragmented High Capital requirements due to increasing real estate prices and high marketing costs in metros Limited access to distribution channels Threat of new entrants
Low Bargaining power due to lack of economies of scale Backward integration of retailers into textile manufacturing introducing private label products. Shoppers Stop(18%) and Westside(30%) Forward integration of major brands(which constitute 9% of clothing industry) like Raymond into apparel retail
Supplier power
Porters framework
Interfirm Rivalry
Fast growing industry-CAGR of 12.4% during 20052010.Estimated CAGR of 30% during 2007-2015 and 1.6 million personnel by 2015 (Source : Mckinsey global report ) Organized retail contributes to only 22% of total apparel retail. Still a lot of scope to make inroads Currently few major players-Foreign players restricted to operate in multi-brand retail
Substitutes are usually cheaper but brand reliability and quality is questionable Low switching costs Two major substitutes-stores in unorganized sectors and customized stitching by tailors
Threat of substitut es
Buyer power
Increasing buyer base in organized apparel retail with growing middle and upper classes(38% of population) Loyalty being built through membership programs. Shoppers Stop(73% of sales in 2010-11 through this).However switching costs are still very low
Government FDI restrictions have reduced competition from foreign players 100% FDI is permitted in single brand retail subject to the condition that at least 30% of the merchandise is manufactured in India which has incentivized foreign players to enter the market
Complementary Services Online Retail-With India poised to have third largest net users by 2013, we certainly would have more online purchasers in India The online retail has seen a 30% increase year on year from the last few years
FIRM ANALYSIS
Trent Ltd. Westside
57 stores
Landmark
26 stores
Fashion Yatra
7 stores
LS
SS
Westside 30% in 2009 10 85% intent in 2011 - 2012 8000 34000 sq. ft (57 stores)
1912 crores
Variety
POSITIONING
Apparel Brand vs Retail Brand
High quality, latest in-style products, international shopping experience and value for money pricing is the experience at a Westside store.
DU PONT ANALYSIS
Gross Margins P: 35% S: 43% Net Profit Margin P: 1.6% S: 3.9% T: 5.4% Operating Expense Ratio P: 26% S: 35% ROE P: 2.7% S: 16.6% T: 5.0% Leverage Factor P: 2.0 S: 2.0 T: 1.6 Fixed Asset Turnover P: 3.8 Asset Turnover Ratio P: 0.8 S: 2.1 S: 6.7 T: 3.4 T: 43% Selling & Administration P: 16% S: 18% T:25% T: 54%
T: 0.6
Thank You