Hari Shankar Goenka has trawled the apparel supply chain. He's done the usual exporter-turned domestic brand manufacturer route. And now the co-promoter of the Rs 300-crore (Rs 3 billion) Bangalore-based Sonal Garments, is getting into retailing.
He is all set to open exclusive garment stores in the major cities to retail his Calzini brand of men's shirts and T-shirts. The company launched Calzini shirts and T-shirts late last year after having manufactured premium socks under the brand for the last seven years.
For starters, at least two Calzini stores will come up in Delhi. "There are also plans to open two stores in Kolkata, and one each in Gurgaon, Bangalore and Hyderabad all by the year-end," informs Goenka. He feels that the exclusive stores will add to the "perceived" value of the Calzini brand.
"Retail is a booming industry and because we have the supply chain in place it was only logical for us to move into retailing our own brand." To capture the retail market, Calzini stores will also stock trousers. "We plan to brand trousers though we will not manufacture them," says Goenka.
Commenting on Sonal's plan to enter the retail business, Raghav Gupta, associate director, KSA Technopak, says: "It's the trend in the market. Manufacturers/exporters understand international trends and have the expertise to develop products." Goenka adds that profits in India are at least 20 per cent higher than those in the foreign markets.
So for a garment export house that supplied to the likes of Calvin Klein, Guess, J C Penny, Nordstorm, C&A and H&M in 1990, it seemed only logical to enter the Indian market in 1997. Sonal Intertrend Ltd, with 12 per cent equity each from the Swiss Intertrend AG and Calzificio Kim from Italy, was set up and started making socks.
The Sonal group has 22 manufacturing units in Bangalore and one in Sahibabad. Sonal Intertrend manufactures 30,000 dozen pairs of socks a month of which 90 per cent is exported.
Moreover the company manufactures 5,000 pieces of shirts a month and 2,000 T-shirts. Sonal Intertrend's turnover in 2003-04 touched Rs 10 crore (Rs 100 million). With an investment of Rs 1 crore (Rs 10 million) in its future business plans, the company hopes to touch Rs 15 crore (Rs 150 million) in 2004-05.