Regional Brand

Slow and steady

Menswear Turtle has grown beyond its humble origins. But can it survive the onslaught of low-priced mass brands?

Why get lost in a dark avenue when you can turn Turtle?”; “why get hit by arrows when you can turn Turtle?”; “why get conned by every Hewey, Dewey and Louis?” — in the garish, fluorescent early nineties, it was quite common for Kolkata’s citizens to spot cheesy, zany advertisements to this effect on hoardings across town. Meant to announce the arrival of a new premium apparel brand, these hoardings achieved the purpose of holding the public’s attention.

With its blanket coverage, this relative upstart was trying to take on established rivals such as Park Avenue, Arrow and Louis Phillippe, positioning its products as chic alternatives to the offerings of these brands. Its guerilla strategy succeeded and Turtle — the company to whom the aforementioned hoardings belonged — soon became the go-to brand for ready-made men’s apparel. 

Since its inception in 1993, Turtle has emerged as one of India’s fastest growing menswear companies, selling everything from T-shirts and trousers to accessories. Headquartered at Howrah, on the outskirts of Kolkata, with an office space of about 30,000 sq ft, factory and warehouse space of 60,000 sq ft and a capacity of 2.5 million pieces a year, Turtle has branched out across the country. 

“The turtle is a spiritual creature. It represents timelessness, endurance and longevity,” says Amit Ladsaria, director, Turtle Limited. Which is why, on a warm Sunday evening all the way back in 1992, as Turtle promoter and MD and Ladsaria’s uncle Sanjay Jhunjhunwala sipped his coffee and watched Teenage Mutant Ninja Turtles on the pre-cable television network, he decided to set up a company inspired by the gentle animal. 

The duo started out by setting up a garment store in Howrah with two employees and a seed capital of ₹40,000 from their savings, with little or almost no experience in the trade. “Sanjay had an understanding of fabrics from his stint at a cloth merchandising factory in Howrah,” says Ladsaria. “I had a very limited trading background and was a school dropout,” adds Sanjay with a chuckle. And, like they say, the rest is history.

From sales of ₹27 lakh in its first year (1993) of operation, the company today clocks over ₹150 crore (FY14) in revenue. Profits, too, have grown at a healthy clip. (see: Coming of age). The company’s twin brands, Turtle and London Bridge, contribute 80% and 20%, respectively, to the top line. “To us, the brand today stands for fashion at affordable prices,” says Ladsaria.

Inching forward

To understand how Turtle achieved its aggressive growth, let’s take a look at the branded apparel market in India. According to a recent study by Technopak, the domestic apparel market, which was worth ₹2 lakh crore as of 2012, is expected to grow at a CAGR of 9% over the next decade.

Further, the recent cancellation of excise duty on branded apparel has provided an impetus to retailers in terms of the overall market sentiment. With a size of ₹87,500 crore in 2012, menswear is the largest segment in India’s apparel market, accounting for a 42% share of the overall market. In comparison, womenswear makes up 38%, while kidswear accounts for 20% of the market, according to Technopak.

The menswear market can be further divided into various categories, including woven shirts, trousers, denims, winter wear, innerwear, T-shirts, suits, active wear, ethnic wear and daily wear. The woven shirts category is the single-largest within the menswear market, followed by trousers and denim. The menswear market in India is expected to grow at a CAGR of about 8.5% over the next five years to reach ₹1.3 lakh crore by 2017, the study says. Denim, active wear and T-shirts are high-growth categories within the menswear segment, with CAGRs of 16%, 14% and 12%, respectively, according to Technopak.

At present, Turtle is available in over 400 cities in India, with a presence in 1,200 multi-brand outlets and over 85 exclusive brand outlets. It is also present overseas in places such as Dubai, Bahrain, Muscat, Saudi Arabia and Kuwait and Indian offline and online stores such as Central, Pantaloons, Shoppers Stop, Jabong, Flipkart, Myntra, Homeshop18 and Snapdeal.

Turtle is also the first apparel brand in India to commercially produce khadi (a hand-spun, hand-woven, eco-friendly fabric) shirts and jackets. It has also launched footwear, headgear, bags and eyewear lines to offer a head-to-toe range of apparel. All this is probably why retail giant Future Group acquired a double-digit minority stake in the company in 2008. 

Another significant landmark for Turtle was the year 2006, when the company made a strategic shift from polyester-cotton blended clothes, which had a slightly lower market value, to pure cotton clothes. “At that point, there were many regional players in the polyester-cotton segment. Hence, we decided to go premium,” says Shitanshu Jhunjhunwala, director, Turtle. The company has since been registering 30-35% growth every year, now perceived as a premium, aspirational brand, with sales doubling to ₹86 crore in 2011 from ₹40 crore in 2006.

“It was around this time that we started getting acceptance at major retail outlets such as Shoppers Stop and Pantaloon Retail. We also started expanding our exclusive branded outlets network by 20-25 every year,” says Shitanshu. Adds Shital Mehta, CEO, Pantaloon Retail, “Turtle has very strong brand equity in east India. Hence, our stores in that part of the country always stock the brand.” Incidentally, Pantaloon holds a double-digit minority stake in Turtle, though the management refuses to reveal the exact stake. 

In 2008, Turtle launched brand London Bridge, which started catering to the blended polyester-cotton segment. “Our dealers told us that we should not completely exit that segment, since there was significant demand there as well,” says Shitanshu. The company registered another spike in revenue after expanding office space from 7,500 sq ft to 30,000 sq ft in 2012, with the numbers going from ₹86 crore in 2011 to ₹122 crore in 2012. 

The company has realised that it has to keep up with changing trends, which is why in 2014, it started selling its merchandise through online portals such as Jabong and Flipkart. Says Arvind Singhal, chairman, Technopak Advisors, “Turtle’s positioning is very interesting. It has always maintained its focus on regional markets, not national. Secondly, the brand has also got its price-design ratio right. While its fashion quotient is good, the pricing is moderate, which is a healthy balance.” Turtle’s clothes are priced in the ₹1,095-1,395 range and its target customers are middle or upper middle class youth. 

“Turtle’s strict focus on quality, supply chain management and mid-level pricing has helped it in the long run. In the apparel market, it is important for retailers to maintain a balance of quality, quantity and pricing and cater to the needs of the market,” says Rahul Mehta, MD, Creative Casuals and head of the Clothing Manufacturers Association of India.

Designed to last

According to Technopak, the global textile and apparel industry is expected to grow to $662 billion by the next decade, clocking a CAGR of 5%. The share of the menswear segment in the apparel basket might drop to 40% from the 43% currently, the report indicates, while sectors such as women’s western wear and denim might grow faster than the others.

This growth will be fuelled by population growth, an increasingly younger demographic, greater spend on fashion and a growing economy. The key players in the Indian apparel and textile retail segment — and Turtle’s competition — are the Raymond group, Arvind Mills, Aditya Birla Nuvo, the Vardhman group, the Welspun group, Globus, Shoppers Stop, Lifestyle International, Ebony Holdings, Mandhana Industries, Alok Industries, Gokaldas Exports, Westside and Pantaloon Retail India. 

Besides, the fate of the apparel industry is tied in with the overall economy and in a weak, inflationary environment, all apparel players are hit by poor demand and weak consumer sentiment. Turtle is no exception. After growing at an average of 40% between FY08 and FY12, sales growth plummeted to an average 11% over FY13-FY14, according to data from Ace Equity. Ladsaria feels the challenge for the brand is to develop the ability to cater to the needs of consumers.

“Often, consumers do not get what they want. We have to procure the right things at the right time and attract more customers,” says Ladsaria. However, Singhal believe the issue of supply chain management is not just confined to Turtle, but is endemic to the apparel industry. Despite cost pressures, the management is banking on proper control of inventory and expansion to keep the momentum going. The company plans to open 20 more stores by 2015, of which 15 would be company-operated and the rest franchisee. “We will invest ₹35 lakh-40 lakh per store and spend around ₹6 crore on advertising and promotion over the next year. In all, we will invest ₹15 crore towards expansion expenses, which would be raised by internal accrual and bank loans,” says Ladsaria. 

Experts, though, believe it won’t be smooth sailing for Turtle and feel that the brand has to really upgrade itself to move up the value chain. Shreyas Joshi, CEO of textile and clothing business MSL group, says, “Turtle is a mass brand. Because of the onslaught of online players, a lot of low-value, mass brands are sold at huge discounts. Hence, Turtle needs to take on a more premium image to sustain itself in the long run. Also, the brand needs to improve the look and feel of its stores to stay competitive and profitable.” 

That observation is not lost on Turtle’s owners. “In our business, we need to constantly create and innovate — and we are trying to do that,” says Sanjay, who started his career as a salesman in a homegrown textile retail outlet based in Howrah. For a brand that has traversed the distance from the shores of Kolkata, the Indian apparel industry seems to be a race Turtle is determined to win, after all.