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Ladies' footwear to come of age
Smita Tripathi |
August 30, 2003
It's a big step forward for British Asian businessman Baljit Virk. For around 30 years Virk has thrown heart and soul into the shoe industry as a supplier of ladies' footwear to international chains like Marks & Spencer and Top Shop. Now, the London-based businessman is opening his own chain -- in India.
Virk is putting his foot in the door of the Indian market quickly. He has just opened a glitzy 2,300 sq ft showroom in Gurgaon's Metropolitan Mall. And he'll spend around Rs 20 crore (Rs 200 million) to open 10 more stores in the next 18 months.
Virk is, for the time being, focusing mainly on ladies' footwear in which he has specialised for years and where the competition is from the unorganised sector.
Says Virk, "Unlike the men's footwear market in India, the ladies footwear market does not have any exclusive high-fashion ladies' brand. That's what we are going to provide."
Virk clearly has ambitious plans for the Indian market. Back in 1990 his company Carlton Overseas opened a manufacturing facility in India that makes around 2,000 shoes a day for the international market.
Now, Carlton is setting up an 80,000 sq ft state-of-the-art plant at Manesar, Gurgaon and operations will start in October. At full tilt the plant will be able to turn out 8,000 pairs of shoes daily.
But Carlton is also counting on its international experience and styles to attract customers. Nearly 70 per cent of the shoes sold in the Indian store will be manufactured abroad.
Says Virk, "If everything is manufactured at the same factory, limitations as per designs and styles set in. By getting shoes from across the world, we can ensure that many more styles and patterns."
Being a supplier to the giant chains is a very different business from selling under his own brand name.
Virk, however, reckons that Carlton can pull it off. The company's shoes won't come cheap and will cost anywhere between Rs 750 and Rs 5,000.
But is there a market for such premium shoes in India? Virk is targeting the burgeoning middle class and the fashion-conscious upper class and feels the timing is just right.
"Indians are fast becoming highly fashion conscious and are familiar with all the international trends. They are willing to pay a price if the quality and style demands it."
It has been a long haul for the Jallandhar-born businessman who moved to London in 1967 as a 15 year old.
In 1971, he teamed up with an uncle and started his footwear business in a basement in the down-at-heel East End of London. The business, started extremely modestly on an investment of £300.
Says Virk: "We used to make 24 pairs of ladies' shoes a day and supply them to small shoe shops in town."
As demand increased, Virk realised that he couldn't travel very far with handmade shoes and that he would have to start mechanical manufacturing.
A manufacturing unit was set up on the outskirts of London in the mid-'70s (this was sold later due to high manufacturing costs).
By the '80s the footwear industry had altered once again and Virk was moving to keep up with the changes.
He tied up with manufacturing units in Europe, Vietnam and China, which were manufacturing exclusively for him as per his designs and specifications. Finally, the Carlton London brand was launched in the early '90s.
Carlton has come a long way since its modest early days. Today it is a Rs 100-crore (Rs 1 billion) company that specialises in ladies' footwear.
The company sells over 2 million pairs of shoes annually and the brand is available in the UK, Italy, Spain, Portugal, Canada and USA.
Can Carlton establish itself in the Indian market? The shoe market in this country is reckoned to be worth around Rs 8,000 crore (Rs 80 billion). Out of that about 40 per cent is ladies' shoes.
However, nearly 90 per cent of the ladies' footwear market is unorganised and it is this market which Carlton London will have to take head on to be successful.
Says an Agra-based shoe exporter, "Establishing a ladies' shoe brand in India is difficult because the market is highly unorganised and fragmented. People go to particular shops rather than for specific brands."
But other shoe companies which are planning to enter the ladies' shoe market feel that once the customer is aware, the brand can be established.
Says Pankaj Savita, the chief marketing officer of the Rs 35-crore (Rs 350 million) Lee Cooper shoes, "The customer needs to be informed that an international brand is available right here. Once that is done they will buy the brand rather than just any shoe."
Lee Cooper which till now was exclusively manufacturing men's footwear is launching its range of ladies' shoes in October.
Carlton has a couple of other advantages. It keeps costs under control by manufacturing it's own components such as soles and in-soles.
Another reason why Virk believes he will be successful in India is that he is mainly sticking to a core competency -- ladies' footwear.
"Making a shoe is very different from making a garment. A lot of engineering goes into it and therefore it takes longer to perfect the skill," says Virk.
However, Carlton, London stores will be selling -- but not making -- mens' footwear plus bags and other leather accessories.
These will be outsourced from across the world and sold under the Carlton-London brand. The store will also be selling some leading international mens' footwear brands.
But why has Carlton-London decided to come to India now? Virk feels the timing is just right since the retail sector is picking up.
"With new malls opening up, shopping is no longer just a necessity. People spend time in these places and buy things they like."
Moreover, it is easier for retailers as well since there are better facilities and the leases have international terms.
Carlton is banking heavily on the fact that it will provide international quality, styles and designs.
It has a team of over 12 designers in India while there are four in its London office and two in the US office.
"We will ensure that the latest designs in Europe and US are available in India simultaneously and don't find their way to the Indian market after six months to a year," says Virk.But Virk has a fight on his hands and he knows it. It won't be easy to lure customers away from the slew of neighbourhood shops selling everything from chappals to high heels.