Indian Stores Among Best in generating revenue per square feet per year.
What is M.A.C?” The question, posed by Govind Shrikhande of Shoppers Stop, must have taken the top brass at Estee Lauder Companies by surprise.
To the top managers of the New York cosmetics group, the question may even have come across as a case of rare ignorance about Make-up Art Cosmetics or M.A.C, especially surprising from the boss of India’s largest department store chain who had been pitching for a partnership with Estee Lauder in India.
But just four years later, two of the 20-odd stores that Estee Lauder runs in partnership with Shoppers Stop in India rank among their top 10 worldwide in terms of revenues.
And Estee Lauder is not alone.
Scores of leading international brands – Swarovski, Accessorize, US Polo, Aldo and Promod, to name a few – are realising that some of their stores in still third world India are among their most successful across the world, helped by a constantly expanding army of consumers with increasing disposable incomes and high brand awareness.
Such is the level of awareness that it has even taken retail industry veterans by surprise. Shrikhande drew a blank then about M. A.C, but consumers in India knew about the Canadian brand that Estee Lauder had acquired in 1994. “Many consumers knew about the brand and were using the products even before it entered the country officially,” he says.
And now M.A.C stores at Select City Walk shopping mall in south Delhi and at Dynamix Mall in Mumbai’s Juhu are generating revenues in excess of $1,000 per square feet per year, executives who did not wish to be named said.
High-end crystal products maker Swarovski’s stores at Bandra in Mumbai and at the T3 terminal at Delhi airport rank among its top stores by sales, says Sukanya Dutta Roy, director of the company’s consumer goods business.
Similarly, British fashion accessories retailer Accessorize’s store at Ambience Mall in Gurgaon is the company’s second biggest revenue earner, clocking sales of about $600 per square ft per year.
Two of apparel brand US Polo stores also rank among the top ten globally. The 1,000 sq ft stores in Delhi and Bangalore generate sales of around $700 per sq ft a year, says J Suresh, managing director of Arvind Lifestyle Brands, which launched US Polo in India barely two years ago. Sales at the company’s other stores across the world usually vary between $200 and $500 sq ft a year.
Women’s fashion brand Promod’s store in Delhi reports the highest sales per sq ft in Asia, while Canadian shoe and accessories brand Aldo has two of its top 50 stores in India.
While some analysts believe that the performance at Indian stores may reflect the declining offtake in the more developed markets, others argue that several brands generate above average sales for short periods because they have a few stores servicing a large catchment.
“The reason could be initial attraction of the brand and fewer points of sale compared to the size of the overall consuming population,” says Ramesh Tainwala, CEO, Planet Retail.
At German sportswear brand Puma, executives do not look at sales figures alone but also factor in the exchange rate fluctuations. “We compare performance of Puma stores on a percentage profitability basis as opposed to sales per square feet,” says Rajeev Mehta, managing director of the company which counts three of its stores among the top ten globally.
Even as some analysts view the strong sales at Indian stores of global brands with caution, Raghav Gupta, principal at management consulting firm Booz & Co, points to the emerging big picture. “It links back to the overall position that India is starting to take in the global economy,” says Gupta.
Global India Stores
Juhu in Mumbai and Select Citywalk in Delhi
Bandra and Delhi Airport Terminal 3
Ambience Mall, Gurgaon
Bangalore’s Garuda Mall, West Gate Mall in Delhi, and Church Road in Pune
Select Citywalk Mall at Saket in Delhi, and The Forum, Bangalore
Select Citywalk Mall in Delhi
Select Citywalk Mall and Palladium
Filed under: Apparel / Garment, Chain Stores, Department Store, Leisure & Lifestyle, Luxury Stores, Retail Formats, Retail Verticals | Tagged: Accessorize, Aldo, Ambience Mall Gurgaon, Chain Store, Citywalk Mall Delhi, Department Store, Dynamix Mall Mumbai, Estee Lauder, Garuda Mall Bangalore, M.A.C., Make-up Art Cosmetics, Palladium, Promod, Puma, Shoppers' Stop, Swarovski, US POLO, West Gate Mall Delhi |