The Arvind Group expects to reach $3 billion in topline by FY19, with $1 billion targeted to come from brands. The major growth drivers will be B2C businesses, growing at 30-35 per cent annually, whereas large growth will be led by garmenting operations in textiles.
Arvind expects the e-commerce business to contribute Rs. 1,000 crores to its revenues in three years. The company is also looking at expanding its ‘The Arvind Store’ to 165, from the existing 142, by the end of this fiscal. Expansion which will be mostly through the franchise model, will have specific focus on Tier-II, III, IV, V cities and towns.
The textile and apparel major forayed into setting up of an apparel park in the early months of 2014. In what would be the company’s first such park, Arvind is also planning to set up a garment manufacturing plant within the park as its anchor unit.
The company is planning to invest around Rs. 125 crores for the plant which will have a capacity to produce nine million pieces of garments. Expected to be commissioned in the next 12 months, the apparel manufacturing plant will garner a revenue of Rs. 600 crores. The manufacturer plans to expand the garment capacity by another 6-7 million in a year-and-a-half with a current capacity of 10 and 11 million garments.
Meanwhile, even as it expands its apparel manufacturing capacity, the company has also upped the ante in its brands and retail business segment. The group already has licensing relationships with international brands such as Gant, Arrow, Izod, Energie, US Polo Association, Elle, Cherokee, Mossimo, Geoffrey Beene, Debenhams, Nautica, Next and Hanes, among others. However, Arvind is targeting revenues of Rs. 5,000 crores from its brands and retail businesses alone in the next five years, which currently stands at around Rs. 2,000 crores of its total revenue.
Aiming to end the year with a revenue of about $1 billion, sources at Arvind Ltd. say it is working hard to embrace alternative streams such as the digital and technical clothing segments which will completely change the landscape of the business. Currently, the group’s business is fuelled through tie-ups with major international retailers. The company is boosting its manufacturing capabilities in India to service global market players and aims to make the concept of custom-made so powerful that it gets global appeal. With several international brands in its kitty, the company is all set to roll out its own readymade brand by March.
The company is also looking to expand its operations in Karnataka and Gujarat, beginning with areas outside Bangalore in the coming year. In a two-phased expansion plan, the company will expand in India in the first phase and thereafter look to foray outside the country.
Joint ventures
Arvind recently announced its tie-up with Goodhill Corporation of Japan as suit manufacturer for a JV factory with an investment of Rs. 40 crores. The factory will have the capacity to produce 3.5 lakh pieces of jackets and six lakh pairs of trousers annually. The company has picked up the 49 per cent stake held by the Murjani Group in Calvin Klein in India. With this, Arvind and PVH Corp are expected to drive Calvin Klein’s business in the country.
The joint venture will focus on the expansion and enhancement of the existing Calvin Klein Jeans apparel and accessories (including belts, bags, and small leather goods) and Calvin Klein Underwear (including sleepwear and loungewear) businesses. PVH and Arvind are also partners in a joint venture that licenses PVH’s Tommy Hilfiger brand in India.
Arvind Ltd. and Japan’s OG Corporation inaugurated manufacturing facilities of their joint venture, Arvind OG Nonwovens Pvt. Ltd., near Ahmedabad, in May 2014 with an investment of about Rs. 50 crores. Arvind holds a 74 per cent equity stake in the JV with the remaining being with OG Corporation. The joint venture will manufacture high-quality non-woven fabrics using needle-punch technology for bag-house filtration, artificial leather and a variety of other applications. The new venture is targeting a turnover of over Rs. 100 crores in three years.
Arvind Internet Ltd. (AIL), a start-up by the Arvind Group, is ready to revolutionise fashion and retail across India with its online custom clothing brand, Creyate. The E-commerce initiative will be a major growth driver for Arvind which now intends to extend its innovative and best in class brand experience to the online world.
Creyate plans to offer an alternative to ready-wear as well as traditional custom clothing and targets to be a over Rs. 100-crore brand by 2015. It is also launching stores in 15 cities, and offers home visits in major cities. Riding on Arvind Group’s supply chain prowess and manufacturing might, AIL is planning to take Creyate to global consumers next year starting with the US market where online custom clothing is a large thriving market.
Arvind Lifestyle Brands Ltd. (ALBL) is bringing The Children’s Place (TCP), the largest American kids speciality apparel retailer, to India. It has entered into a franchise arrangement with TCP and expects to open its first retail store in Bangalore by mid-2015. Subsequently, the company will target other large cities and towns and plans to roll out about 50 stores over the next five years.
ALBL has also tied up with Gap Inc., to open Gap stores in India. The first stores are expected to open in Mumbai and Delhi starting with Gap’s Summer 2015 collection for adults, kids and babies. Arvind plans to open about 40 franchise-operated Gap stores in India.
