SBICaps IndianApparelRetailSector Overview June2007

Indian Apparel Retail Sector
An Overview
Prepared By
the world’s leading M&A alliance June 2007 Strictly Confidential

Indian Apparel Retail Industry
Indian Apparel Industry - Overview

•The Indian Apparel Industry is segmented into two sectors:
• Domestic & Export segments
RMG* Market Size : 2005-06 Value Per cent

Industry size (Rs. Million) ( EUR Billion)
- Domestic Market size (A) 13.64 68.8
- Export Market size (B) 6.10 31.2
Total Market size (A +B) 19.75 100
Note: Per cent indicates the domestic and export market with respect to the total market size.
* RMG – Ready-Made Garment Industry
•India is very strong in niche segment and short-run fashion garments
the world’s leading M&A alliance Source: CRISIL Research, Readymade Garment (Annual Review) – February 2007
Ready-Made Garment Industry
– The Domestic RMG industry is highly fragmented with a few players in organized
sector
– This degree of fragmentation can be attributed to the erstwhile government policies
– Small and unorganized local players largely dominate the domestic RMG Market
– The domestic market worth Euro 13.64 billion can further be segmented into:
– Men’s wear segment
– Women’s wear segment
– Kid’s wear segment
Value (EUR Billion) Per cent

- Men’s Wear segment 5.65 41.4
- Women’s Wear segment 4.69 34.4
- Kid’s Wear segment 3.30 24.2
Note: The values and percentage in the table corresponds to the domestic market only.
COATS
– Of these three segments, Men’s Wear CASUAL
segment is estimated at 5.65 Euro billion
in 2005-06 accounting for about 41.4% of T-SHIRTS
COATS
FORMAL
the total domestic RMG market
MENS
• Segment has grown at a CAGR of SEGMENT
around 8% from 2001-02 to 2005-06
JEANS
• Men’s Wear segment has further been WEAR
TROUSER
categorized as depicted by the diagram

SHIRTS
DRESSES
– The Women’s Wear segment is estimated at

T-SHIRTS SAREES 4.69 Euro billion in 2005-06 accounting for
about 34.4% of the total domestic RMG market
WOMEN”S
SEGMENT
• Segment has grown at a CAGR of 8 % from
JEANS
TOPS 2001-02 to 2005-06
WEAR
• Women’s Wear segment has further been
SHIRTS
/TROUSERS categorized as depicted by the diagram
UNIFORM
– The Kid’s Wear segment is worth 3.30 Euro billion
and accounts for about 24.2% of the total domestic REGULAR
T-SHIRTS
RMG market DRESSES
• segment has grown at a CAGR of 14% from 2001- KIDS

SEGMENT
02 to 2005-06
• Kid’s Wear segment has further been categorized JEANS
TROUSER
WEARS
as depicted by the diagram
SHIRTS
– The export market for readymade garment is estimated at 6.19 Euro billion of the total
market size.
• The United States (US) and the European Union (EU) being the key destinations.
Value (EUR Billion) Per cent

- US 2.42 39.0
- EU (25 countries) 3.12 50.4
- Others countries 0.66 10.6
TOTAL 6.10 100
Note: These values and percentage is corresponding to the export market only.
– The RMG industry is the second largest employment generator & employs nearly 4.5 million
people.
SWOT Analysis of Indian Apparel Industry
STRENGTHS OPPORTUNITIES
• Increasing disposable incomes of • Increasing demand for luxury
the people brands from the middle class
• Brand conscious customers • Research and new product
development can help the
• Availability of cheap finance
companies to move across the
• Growing domestic market, value chain
increase in number of malls
WEAKNESSES THREATS
• Predominance of unorganized • Increased competition in the
sector domestic markets
• Technological obsolescence in the • Cheaper imports
supply chain
• Changing Government’s policy
on FDI
the world’s leading M&A alliance

Foreign Direct Investment (FDI)
• The Department of Industrial Policy & Promotion issues the guidelines for Foreign Direct
Investment in India
• FDI upto 51% has been allowed in retail trade of ‘single brand’ products with prior government
approval and under certain condition:
– Products to be sold should be of a ‘single brand’ only
– Products should be sold under the same brand internationally
– ‘Single Brand’ product retailing would cover only products that are branded during
manufacturing
• For example: an umbrella brand like ‘ Christian Dior’ would not be allowed to stock
different brands like j’adore, Pure Passion and Dior Addict in one store
the world’s leading M&A alliance Source: www.dipp.gov.in

Foreign Direct Investment
CURRENTLY
PERMITTED
ROUTES
FRANCHISING CASH & CARRY JOINT DISTRIBUTION MANUFACTURING

( wholesale trade) VENTURE
Franchising Joint Venture

• Rights are granted by one party to another for some • International brands provides equity and support to a
stipulated amount of money local Indian entity
• Franchisee is allowed to conduct business using • Share of the foreign player is restricted to 49%
Franchiser’s know how and brand name Distribution
• International Player sets up a distribution office in
Cash & Carry (Wholesale Trade) India and supplies products for sale to local retailers
• Allowed 100% FDI under the automatic route by • Can also set up franchised outlets for brands
FIPB, model is designed in a way that the wholesaler Manufacturing
deals with small retailers
• International Player sets up an Indian company to
manufacture its product and also gets the right to
retail in India
the world’s leading M&A alliance Source: www.dipp.gov.in
Key Business Models for Manufacturing of Apparel
• Business models can be categorized as following:

• Manufacturing the apparel on their own
• Purchasing the apparel from the contract suppliers / outsourcing
• Giving the designs to the contract supplier and get the apparel manufactured
Manufacturing Distribution Branding

Stage Stage Stage
Brand owner may provide designs and/or raw materials
Outsource
Distribute through
Manufacturing
own stores
Brand Name
Own
Manufacturing Distribute
through Multi-
Sell to a brand Brand Outlets
owner or
Purchase brand

Key Business Model
– Companies may follow a Single Strategy from among the list of business models mentioned
before.
– Very often a company can combine one or more of the mentioned business models to form a
Multiple Strategy
– For eg. partly manufacturing and partly outsourcing, owning a few brand names and
purchasing some from others, selling partly through the own stores and through
Traders and Commission Agents.
– There is also a dominant role played by the players in the unorganized sector
• Some of the participants from this sector are:
– Traders – purchasing branded or un-branded garments and selling them through own
retail shops or to other retailers
– Commission Agents - acting as a middle agencies between manufacturer, purchaser
and distributor.

Distribution Channels in Indian RMG Industry
DISTRIBUTION
CHANNELS
OWNED STORES /
RETAILERS
EXCLUSIVE
BRAND OUTLET
DISCOUNT DISTRIBUTORS
STORES
EXPORTS MULTI-BRAND OUTLETS or

SHOPPING MALLS

Various Distribution Channels
• Owned Stores / Exclusive Brand Outlets

• Advantages
– direct medium of selling apparel
– high realization for the garment sold
– end-user feedback and knowledge of their preferences
• Disadvantages
– requires greater advertising expenditure
– greater fixed costs
• Some of the Players following this channel
» Provogue
» Raymonds
» Madura Garments Manufacturer-cum-Distributor
» Arvind Brands
» Zodiac Clothing
» Century Textiles

– ‘Multi-Brands Outlets’ or Shopping Malls

• Organization sells apparels to multi-brand outlets, which in turn sell them through large retail space
• MBO’s are located in prime locations of the various cities and towns ensuring maximum reach
• MBO’s are chain of shopping malls having a presence in more than one location
• Realization from this channel is lower than those earned by selling to the retailers; as MBO’s keep
higher margins because their costs are higher
• Some of the major players in this channel of distribution:-
» Shopper’s Stop
» Pantaloon Retail
» Westside (Trent) Manufacturer-cum-Distributor
» Globus
» Pyramid Retail
» Reliance Retail

– Distributors
• This channel involves two middle agencies between the seller and the end-user
• Organization sells it to the distributor, who in turn sells to the Retailers or MBO’s
• Realization from this channel are low
– Discount Stores
• For selling apparels at lower prices to attract larger volumes
• Used for selling apparels with minor defects or for selling slow moving stocks
• Low realization from this channel as garments are old-fashioned or sold at low prices for gaining big
volumes
– Retailers
• Company sells garment to Traders or Commission Agents
• Greater reach of the distribution channel
• Creation of a middle agency between the organization and the end-user
• Lower realizations from this channel

Comparison Between Different Distribution Channels
Higher
realizations
than selling
through HIGH
distributors
Low
realizations, but
lower
advertising and
fixed costs MEDIUM
RETURNS
High
realizations,
but
advertising
LOW Advertising and and fixed
fixed costs are costs are
lower high
RETAILERS & MBO’s OWN STORES

DISTRIBUTORS
DISTRIBUTION
the world’s leading M&A alliance CHANNELS
Industry Snapshot
• AT Kearney report suggests that the Indian retail market has the largest growth potential
in comparison to the international retail market and is expected to grow to 4 to 5 per cent
a year in volume and 13 per cent in value.
Some important upcoming potential players of this market are:
• The $600 million Dubai-based The Landmark Group which entered the Indian market
in 1999, with its chain of premium 'Lifestyle Store’ the group aims to provide a stiff
competition to the retail majors like Pantaloon, Westside, Shopper’s Stop
– The Group has its presence in 5 cities - Chennai, Hyderabad, Bangalore, Mumbai
and Gurgaon through 10 lifestyle stores
– Also planning to bring concept stores to India including Max Retail, Home centres,
Max hypermarket
– Landmark group currently in discussions with French hypermarket operator
Carrefour to roll out the brand in India
– The leading UK fashion retailer - New Look, has signed a new Middle East regional
franchise agreement with the Landmark Group
– Also the Group intends to invest heavily in the fast growing Retail Market by
opening
outlets in Delhi, Pune, Kolkata and Ahmedabad.

Industry Snapshot
• ITC’s Lifestyle retailing business division established a chain of exclusive specialty stores, in July
2000
• Offering to the premium consumer with
– Wills Classic – range of Formal Wear
» Launched in 2002, provides the consumers a distinct product offering
– Wills Clublife – range of Evening Wear & designer accessories
» Launched in 2003,
– Wills Sport – range of Relaxed Wear
• ITC launched its brand ‘John Player’ in December 2002
– With this brand the company offers a complete wardrobe of Casuals, Party, Work
wear and Denims
– The brand is available across the country through a nation-wide network of exclusive
stores and multi-brand outlets
– Website: www.willslifestyle.com

Industry Snapshot
• Some of the premium international brands like the Gucci Group, Fendi, are in talks
with major retailers like the Pantaloon, Lifestyle, Shopper’s Stop etc to set up their
brands in India
• The Murjani Group with its Joint Venture with Marvin Traub focuses on bringing
international brands to the Indian retail market
– The Murjani Group launched Tommy Hilfiger in India in 2004
– Future strategy of the group for the Indian markets would be to create multi-
brand retail platform
– The Group has already formed exclusive distribution agreements with the brands
like Gucci, Jimmy Choo, Calvin Klein, FCUK, TUMI and Build-A-Bear
– Website: www.murjanigroup.com

Profile of Major Players
• The Major players in the Indian RMG Industry are profiled as following in
the next few slides:
1. Pantaloon Retail (India) Limited

2. Shopper’s Stop
3. TATA – Trent
4. Globus Stores Pvt Ltd
5. Piramyd Retail Ltd
6. Arvind Brands Ltd
7. Provogue ( India) Ltd
8. The Raymond Group
9. Madura Garment
10. Reliance retail Ltd
11. Wills Lifestyle (Lifestyle Retailing Business Division, ITC)
12. Murjani Group
13. Landmark Group
1. Pantaloon Retail (India) Limited – The Future Group

Pantaloon Retail (India) Limited – The Future Group
– Background
– Incorporated in October 1987 under the leadership of Mr. Kishore Biyani
– Became public limited in 1991
– ‘The Pantaloon Shoppe’ - exclusive menswear store was set up in 1994
– ‘Big Bazaar’ – under the concept of Hypermarket started in 2001
– ‘Pantaloon Retail India Limited’ – a flagship enterprise of ‘The Future Group’
– Retail sector activities - Departmental Stores, Hypermarkets, Supermarkets, Malls and Specialty Stores
– website: www.pantaloon.com
– Business Area
» The Future Group operates through six verticals :
» Future Retail – covering retail business
» Future Capital – catering to financial products & services
» Future Brands – managing all the brands owned or managed by group companies
» Future Space – managing real estate business
» Future Logistics – managing supply chain and distribution
» Future Media – developing and managing retail media space

– Business Strategy
• Targeting greater market share by entering into formats such as departmental stores,
supermarket, hypermarkets, malls etc.
• Developed a Dual Strategy
– Of opening smaller versions in its flagship stores like ‘BIG BAZAAR’
– Opening larger Independent Stores.
• Currently adopted retail format by the group:
– Lifestyle Segment -
» Pantaloon
» Central
– Value Segment
» Big Bazaar
» Food Bazaar

– Private Labels
• Pantaloon’s apparel retail business derives its 75 per cent of sales from its private label
such as:
John Miller shirts JM Sports
Lombard Pantaloon
Bare Leisure Bare Denim
Annabelle Mix Match
Akkriti
– Major Strategic Alliances
• PRIL has entered into 50:50 JV with Ginni & Jonny – known brand for kids
• Sole Franchisee of Mark& Spencer, Guess and Women’s Secret in India
• PRIL holds a 51 per cent stake in JV with Liberty Shoes called ‘FootMart’
runs stores under the name of ‘Shoe Factory’
located in shopping malls and also opened as independent stores

Financial Snapshot
Financial and Operating Performance 2006

(EUR Million)
Total Sales 340.94
PAT 11.15
Equity 4.67
Net Worth 91.62
Market Capitalization 956.60
(as on 5th April ’07)

2. Shopper’s Stop

Shopper’s Stop
– Background
Established in 1991 by the K. Raheja Group
The group is a well known player in the construction sector
It is a Public Limited Company
Principal Fascia – Shopper’s Stop, Crossword, HomeStop, Mother Care, MAC
Retail sector activity – Departmental Stores, Specialty Stores (books, home products,
cosmetics, F&B, Baby Care)
Website: www.shopperstop.com
– Business Area
– The store offers a wide variety of international and Indian brands
– Stocks private labels like Stop, Kashish, Vettorio Fratini, Elliza Donatein
– The store also offer concessionaire space to brands, whereby the counters are arranged
by the employees of the concessionaire

Shopper’s Stop
– Business strategy
– Primarily catering to the Lifestyle Retailing segment through Departmental Stores
• Offers a gamut of products – apparels, accessories, footwear, cosmetics, music, books,
leather products, furnishing etc.
– Ventured to the Value Retailing segment with inception of ‘HYPERCITY’
– Apart from these stores, the company also has presence in Niche Retailing format
• With the brands such as:
– Crossword – a lifestyle bookstore; these are run in 3 formats – ‘ Corner Store’, ‘Brand
Stores’ and ‘Flagship Stores’.
– MAC – it’s a tie-up with a cosmetic major, Estee Lauder
– HomeStop – it’s a specialty store, caters exclusively to home furnishings and furniture
– Mother Care - it’s a franchise agreement with a UK-based Mothercare marketing
baby clothes, toys, baby care products and maternity clothes

Shopper’s Stop
• Future Expansion Plans

• The company plans to form a JV with AGROS of UK to start
Catalogue Retailing Business in India
• Plans to diversify into airport retailing, for which also signed
an MOU with the Nuance Group of Switzerland

Financial Snapshot

(EUR Millions)
Total Sales 117.73
PAT 4.714
Equity 5.97
Net Worth 46.93

3. Tata Trent Ltd

Tata Trent Ltd
– Background
• established in 1998 as a part of Tata Group
• started operations by acquiring the UK-based Littlewoods departmental stores in
Bangalore
• the company owns a chain of department stores across the country & is also increasing
its foothold in the high volume hypermarket sector
• The company has initiated a new retail venture called ‘Infinity Retail Limited’ dealing
primarily in electronic consumer durables
• Website: www.mywestside.com
Tata Ltd
Trent Ltd Infiniti Retail Ltd
Westside Star India Bazaar Landmark Croma

Tata Trent Ltd
– The company has three store formats on which it is current operating
• Westside stores
– Primarily apparel stores comprising a mix of clothes, footwear,
and accessories for men, women and children
– Established its outlets in Mumbai, Pune, Bangalore, Hyderabad, Chennai,
New Delhi and Kolkata
• Landmark
– Company acquired a 79 per cent stake in this Chennai based
books and music retail chain
– The chain has its presence in Bangalore, Mumbai, Vadodara and Chennai
• Star India Bazaar
– First store opened in Ahmedabad (Gujarat) with which company entered the Value retailing
segment
– Store offers wide range of products like staples, perishables, health and beauty products
– The company is planning to open such stores in Mumbai and Bangalore as well
• Infinity Retail Limited
– The company has set up a new store ‘Croma’ which sells electronic consumer durables
– For this a sourcing agreement has been signed with the Australian retailer – ‘Woolworths‘
the –world’s
Company plans
leading M&A to alliance
set up around 100 more such stores in coming years
Financial snapshot
Financial and Operating Performance 2005-06

(EUR Millions)
Total Sales 60.24
PAT 4.23
Equity 2.50
Net Worth 50.35

4. Globus Stores Pvt ltd
– Background
– Set up in 1998 as a part of Rajan Raheja Group
– Currently runs 14 stores across India
– The group is completely into apparel stores with
prime focus on the private labels
– ‘GLOBUS’ and ‘F21’ are the two private labels
» Globus caters to apparel and accessories markets for men,
women and children
» F21 primarily targets the youth
– Company is ISO 9001 certified with ERP-enabled supply chain
– Website: www.globus.in

Globus Stores Pvt ltd
• The company started as a departmental store, but gradually shifted its focus to the apparels and
private labels
» has an in-house team of designers and merchandisers responsible for quality
» Actual production activity is outsourced
• The company is mainly targeting smaller cities like Vadodara, Muradabad, Jamshedpur Ranchi,
Udaipur Bhopal, Ludhiana
• The group is planning to set up 100 stores by 2008 across the country
– Up-coming stores are to set up in Varanasi, Hyderabad and Noida
– Financial information of Globus Stores Pvt Ltd is not available as the company is a privately held
company.

5. Piramyd Retail Ltd

Piramyd Retail Ltd
– Background
– Promoted by the Mumbai-based Ajay Pirmal Group in 1998
– Runs family entertainment centres called ‘Jammin’
– Recently sold one of its mall ‘Crossroads’ to Pantaloon Retail Limited
– To increase the presence
– Retail chain operates in both
» Lifestyle Retail – ‘Piramyd Megastore’
» Supermarket – ‘TruMart’
– Website: www.piramyd.com
• Apart from the metro cities like Bangalore, Hyderabad and Chennai the company is also planning to
expand to Tier II and Tier III cities
• The company will continue with mall development project in Pune, Bangalore, Chennai, Ludhiana,
Jalandhar, Chandigarh and Hyderabad
• The company is also planning to revamp its product mix to focus primarily on the women’s segment
• Also trying to increase its share of private labels by newer categories like women’s ethnic wear and
children wear

Financial Snapshot

(EUR Millions)
Total Sales 17.24
PAT - 1.30
Equity 3.48
Net Worth 20.72

6. Arvind Brands Ltd

Arvind Brands Ltd
– Background
• Subsidiary of Arvind Mills, a major garment manufacturing player
• Caters to the domestic market and is also involved in exports
• It has 3 large manufacturing units, 2 warehouses and 400 sales outlets across the country
• The company has its owned brands and licenses from reputed international brands like Lee,
Wrangler, Gantt, Arrow and Tommy Hilfiger for selling in the Indian market
• It distributes its products through Multi-Brand Outlets (MBO’s), organised retailers and
Exclusive Brand Outlets (EBO’s)
• The company manages various brands like Flying Machine, Newport and
Ruf & Tuf in denim trousers and Excalibur in shirts
• Website: www.arvindmills.com

Arvind Brands Ltd
• ‘Excalibur’ the company’s own brand is revamped as a lifestyle brand
– Expanding the product portfolio to include knits, jackets, t-shirts, blazers and
suits
– Planning to set up 100 Excalibur outlets
• Recently entered into a 40-60 Joint Venture with VF Corporation, a US-based
lifestyle apparel maker and owner of 50 brands, to market its products in India
– VF Corporation owns brands such as Lee, Vanity fair, Wrangler, Nautica,
JanSport and Kipling
– This tie-up has also made the company an exclusive franchisee of ‘Gantt’
» It’s a distributor for the brand across India, Sri Lanka and Bangladesh
» VF Arvind brands Pvt. Ltd. Plans to open 13 Nautica Stores
• Arvind Mills plans to open around 100 megamart stores across 100 cities thereby
enhancing their existing network 54 outlets in 16 cities
– This would increase its presence in Tier II cities as well

Financial Snapshot

(of Arvind Mills ) (EUR Millions)
Total Sales 275.93
PAT 22.11
Equity 36.40
Net Worth 256.62

7. Provogue (India) Pvt Ltd

Provogue (India) Pvt ltd
– Background
– Incorporated in 1997 as ‘Acme Clothing Private Limited’
– Manufacturer-cum-distributor of ready to wear garments mainly deal in men’s casuals
– It launched its fashion brand ‘Provogue’ in 1998
– Company was rechristened as ‘Provogue India Private Limited’ in 2005
– It also started its hospitality business under the brand name ‘Provogue Lounge’
– The company has entered into mall development through a wholly owned subsidiary ‘
Prozone’
– Website: www.provogue.net
• Retail Formats followed by the company:
– ‘Provogue Mega Studios’ – stores a wide range of merchandise
– The company operates through its stores – ‘Provogue Studio’
» These are stores that are managed directly by the company
or through contracts
» Located mainly in malls
– Have allocated space in other departmental stores on a shop-in-shop basis

Financial Snapshot

(EUR Millions)
Total Sales 26.36
PAT 2.077
Equity 2.816
Net Worth 18.93

8. The Raymond Group

The Raymond Group
– Background
• Incorporated in 1925, transformed from textile a major to a
conglomerate
• Along with manufacturing and brand building,
the company has also come retail sector in a big way
• Raymond forayed into garment manufacturing through ventures like
¾ Silver Spark Apparel Ltd – for tailored suits, trousers and jackets
¾ EverBlue Apparel Ltd – Jeanswear
¾ Celebrations Apparel Ltd – Shirts
• The group has its presences in the retail sector through a chain
Of the following:
¾ Exclusive stores - ‘The Raymond Shop’
- Premium retail store offering complete range of men’s wear
¾ Stand alone stores for Manzoni, Park Avenue,
ColorPlus, Parx, Be: and Zapp
¾ Website: www.raymondindia.com

The Raymond Group
• The Raymond Retail Shops are premium retail stores offering complete range of men’s
wardrobe.
– the largest one stop retail network in the country.
– There are over 350 stores exclusive 'The Raymond Shop' (TRS) in prime locations,
in 150 cities in India
– 27 overseas outlets in 15 cities across the Middle East, Sri Lanka, Bangladesh and
Nepal
– Includes top-of-the-line brands - Raymond, Manzoni, Park Avenue, ColourPlus and
Parx.
• Reach of the brand is spread all over the country across big cities and smaller towns thereby
targeting a wide spectrum of consumers
– Also extended its presence in some of the leading Malls with new retail format

The Raymond Group
• Brand Stores
– exclusive stand-alone stores for brands - Manzoni, Park Avenue,
Parx, ColorPlus, Be: and Zapp!
– Each store makes available to customers the entire product
range of garments and accessories
– The highlight of these stores is that they provide customers a
unique and leisurely shopping experience
– Encompassing a look to suit every new occasion – formal,
casual, outdoor and travel etc.

The Raymond Group
• Zapp - a fun place for kids to hang out and shop for colourful clothes and accessories
• Be: - a chain of 15 stores, presenting customers the best of international fashion from
well-known Indian designer, right under one roof
• Parx - for a cool trendy and ‘chilled out’ out of office look
• ColorPlus - exclusive stores where one can shop for smart casual shirts,
trousers and elegant accessories.
• The Park Avenue store - offers the perfect premium lifestyle
experience and address the customers need for Business,
Evening, Leisure, Travel and Heritage Wear
• The Manzoni Luxury Boutique in New Delhi and Mumbai

Financial snapshot

(EUR Million)
Total Sales 229.55
PAT 21.26
Equity 10.67
Net Worth 206.91

9. Madura Garment

Madura Garments
– Background
• Established in 1988 as the garment division of the Indian subsidiary
of Coats Viyella (UK)
• In 1999, Aditya Birla Group acquired Madura Garments and is now a part of Aditya Birla
Nuvo Limited
• focuses on men’s shirt and trousers and has also diversified into jeans and western wear for
women
• The company owns several brands like Louis Philippe, Van Heusen, Allen Solly, SF Jeans
and Peter England
• Website: www.adityabirlanuvo.co.in

Madura Garments
• Plans to strengthens its portfolio in women’s wear, premium clothing and
accessories
• Has tie-up with ESPIRIT, an international lifestyle brand
• Expanding its retailing network by marketing women’s wear under the Van
Heusen brand
• Recently the company acquired Trinetra, chain of 174 convenience stores in
South India

Financial Snapshot

(EUR Millions)
Total Sales 457.51
PAT 32.50
Equity 10.41
Net Worth 379.76
Market Capitalization 1,701.92

10. Reliance Retail

Reliance Retail Limited
– Background
• It’s a wholly owned subsidiary of Reliance Industries Limited
• It’s a potential player which is entering the domestic retail market
with an estimated investment of around Rs. 250 billion
• The company intend to set up chains of hypermarkets, supermarkets, discount stores, department
stores, convenience stores and specialty stores
• These various retail formats and distribution and stocking hubs will be spread across the 784 cities
and 1600 rural towns in the country
• The company intends to open MBO for the apparels and consumer durables
• The company already started its operations with ‘Reliance Fresh’ – supermarket
• Reliance is following a Twin Model for its expansion,
which includes both owning and leasing retail space
• Website: www.ril.com

Reliance Retail Limited
– Initially targeting the five states of Maharashtra, Gujarat, Punjab, West Bengal and Andhra
Pradesh
– To establish pan –India presence in all formats, targeting not only major metros and cities, but
also the second-tier, semi-urban and rural centres, thereby reaching its target of 784 cities and
1600 rural towns

Wills Lifestyle - ITC's Lifestyle Retailing Business Division

Wills Lifestyle
Background:
• Over the last five years, ITC's Lifestyle Retailing Business Division has established a
nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores.
• Beginning with its initial offering of Wills Sport relaxed wear, it has expanded its basket of
offerings with Wills Classic formal wear, Wills Clublife evening wear and a tempting range of
Designer accessories.
• With a distinctive presence across segments at the premium end, ITC has also established John
Players as a brand that offers a complete fashion wardrobe to the youth segment.
Strategy:
• With its brands, ITC aspires to build a dominant presence in the apparel market through a robust
portfolio of offerings.
• Wills Lifestyle has been established as a chain of exclusive specialty stores providing the consumer
a truly 'International Shopping Experience' through world-class ambience, customer facilitation
and clearly differentiated product presentation.
• To enhance product availability through expansion of “Wills Lifestyle” chain of exclusive stores in
high potential catchment malls. The brand is now available in over 150 locations through ‘exclusive
brand outlets’ (EBOs) and ‘shop-in-shops’.

Murjani Group

Murjani Group
Background:
• Founded in 1930, by Mr. B. K. Murjani, the group based its initial success on full vertical
integration in the apparel industry.
• In 1966, the group commenced its transition from manufacturing to designer lifestyle brand
development and marketing.
• In 2001, Vijay Murjani, Managing Director of the Murjani Group, moved to India to head the
Indian initiative.
Strategy:
• The India strategy for Murjani, revolves around the creation of a unique Multi-Brand Retail
Platform, with world renowned, premier international brands.
• In the first phase, Murjani opened eight free standing Tommy Hilfiger stores, across six cities. In
addition, the group also launched several licensed categories including eyewear, watches, shoes and
fragrance through relationships with some of India’s largest and most respected organizations.
• In the second phase of its India strategy, in 2005, Murjani identified several major international
brands, to add to its brand portfolio and secured exclusive, long term rights to India, for 6 world
renowned, premier brands: Gucci, Jimmy Choo, Calvin Klein, French Connection, Tumi & Build
A Bear.

Landmark Group – Lifestyle Stores
Background:
•The $600 million Dubai-based The Landmark Group entered the Indian market in
1999, with its chain of premium 'Lifestyle Store’.
•The Group has its presence in 5 cities - Chennai, Hyderabad, Bangalore, Mumbai and
Gurgaon through 10 lifestyle stores
•The group plans to increase the number of Lifestyle stores, Home Centre chain and
Max stores to 25, 9 and 35, respectively. It now has 9 Lifestyle stores, some 2 Home
Centre chains and 4 Max outlets.
•While the Lifestyle stores will be spread over 60,000 sq ft each, Home Centre will
occupy anywhere between 20,000 sq ft and 40,000 sq ft and Max retail stores will cover
about 20,000 sq ft.
(source: The Economic Times Report)

Landmark Group – Lifestyle Stores
Strategy:
• Entered into franchising of international brands in the apparel and footwear categories in India
through a separate corporate entity, LMG Brands India.
• It has already introduced two international brands — Kappa (an Italian sportswear brand) and
Bossini (a Hong Kong-based casual wear brand). Negotiations are on to launch more international
brands to be sold through its Lifestyle and stand-alone stores.
• Landmark Group’s Indian operations president (finance), Sundar Raman, said the group’s
expansion plans in India entails increasing the footprint of its existing retail formats — Lifestyle,
Home Centre and Max, and forging international apparel and footwear brands franchising
agreements.
• Landmark group is currently in discussions with French hypermarket operator Carrefour to roll
out the brand in India
• Also contemplating launching hypermarkets and concept stores in high-fashion apparel, children
and footwear segments.
• Total investment to expand the group’s existing retail formats is estimated at about Rs 775 crore by
March ’09. Of which Rs 450 crore will flow into expansion of Lifestyle and Home Centre outlets,
and another Rs 150 crore into its recently launched value-retail format, Max Retail. The remaining
Rs 175 crore has been set aside for international brands franchising agreements.
(source: The Economic Times Report)
Abbreviations & Definitions
– RMG – Readymade Garments

– MBO – Multi-Brand Outlet
– EBO – Exclusive Brand Outlet
– Supermarket - is a departmentalized self-service store offering a wide variety of food and household
merchandise
– Specialty stores - are small stores which specialize in a specific range of merchandise and related items
– Department store is a retail establishment which specializes in selling a wide range of products without a
single predominant merchandise line
• usually sell products including apparel, furniture, appliances and electronics
– Hypermarket - is a superstore which combines a supermarket and a department store
• Includes products ranging from groceries to general merchandise
• They are planned, constructed, and executed keeping in mind satisfaction of consumers
• Eg: Carrefour

SBI Capital Markets Limited
A Brief Introduction
the world’s leading M&A alliance June 2007 Strictly Confidential

About SBI Capital Markets Limited
State Bank of India Asian Development
Bank ¾ SBI Capital Markets Ltd. (SBI Caps) was founded in 1986 as a wholly owned subsidiary of
the State Bank of India, the country’s largest bank. In January 1997, the Asian Development
Bank took over 13.84% stake in the equity of SBI Caps
86.16% stake 13.84% stake
¾ As part of State Bank Group with the full backing of SBI, its Indian associates and its
overseas subsidiaries, SBI Caps has direct links with a number of Multilateral Agencies and
International Financial Institutions
¾ No.1 Fund Mobiliser in the Country, raising over Rs.1219.11 billion through public, rights
issue and private placement of equity & debt during the past 5 years
Vision - To be the
best India-based
¾ Pioneer in Securitisation and Privatization: Accomplished the first true Securitisation in
Investment Bank
the power sector in the country and the only investment bank to be co-opted on the RBI’s
Working Group on Asset Securitisation as a Special Invitee
Mission- To provide
credible, professional ¾ Advisor to Government of India on crucial issues like studying India’s Power requirements
and customer - and Role of Central PSUs, Securitisation of SEB overdues and the only non-lending
focussed world- class institution to be a participant in a nodal committee set up by the Ministry of Power
Investment Banking
services
¾ Strong relationship with the Government, having worked for several fund-raising,
strategic sale and other advisory transactions for Government of India and several State
Governments.

Network of Offices & Human Resources at SBI Caps
¾ SBI Caps Corporate Office is located in Mumbai and there are eight Regional
Offices in Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad,

Chandigarh
Chandigarh and Guwahati and an alliance in Bangladesh. The Company has

Guwahati
a strong force of professionals with rich and diverse experience in various
New Delhi
Ahmedabad
spheres of Investment Banking.
Kolkata
Hyderabad
Mumbai ¾ SBI Caps pool of professionals constitutes the best talent drawn from every
Bangalore relevant field - finance, banking, management, accounting and taxation. The
employees in the management and executive cadre consist of experienced

Chennai
bankers deputed from State Bank of India and direct recruits comprising
various professionals from reputed Management Institutes and qualified

Investment Banking Broking
Sales & Distribution Research Chartered Accountants.
SBI Caps is amongst the earliest players in the Indian Capital Markets with fully integrated operations
offering the entire range of Investment Banking services under one umbrella

Strategic Associations / Tie-ups
¾ SBICAP (UK) Limited, floated in 2006 is a wholly owned subsidiary of SBI

SBICAP (UK)
Capital Markets Limited to provide services in the areas of Cross Border M
& A, FCCBs /GDRs, Private Equity, etc.
¾ Tie-up with CLSA for overseas acquisition, strategic investors &

CLSA
international offerings such as ADRs and GDRs.
¾ SBI Capital Markets Limited is the Indian representative of M&A

M&A International
International Inc, which has International network in 38 Countries.
Other International ¾ SBICAP has entered into tie-ups with investment banks in Sri Lanka,
Tie-ups Bangladesh, Oman and Qatar

Domain Expertise
• Mergers & Acquisitions & Advisory • Project Advisory & Structured Finance
¾ Privatisation ¾ Project Appraisal
¾ Joint Venture ¾ Structured Finance
¾ M&A and Takeovers ¾ Credit Syndication
¾ Private Equity/FCCB Placement ¾ Infrastructure Advisory
¾ Financial / Business Restructuring ¾ Securitization
¾ Business Valuation
¾ Rights Issues
• Capital Markets • SBICAP Securities (subsidiary of SBICAPS)

¾ Equity and Debt Origination ¾ Stock Broking
¾ Private Placements ¾ Sales & Distribution
¾ International Offerings ¾ Securities Research

Leveraging M & A International Tie-up
Offices of member firms:
Amsterdam Antwerp
Atlanta Barcelona
Baltimore Belgrade
Beijing Bern
Boston Buenos Aires
Budapest Chicago
Cleveland Copenhagen
Dallas Dublin
Hamburg Helsinki
Hong Kong Istanbul
Jacksonville Kiev
Ljubljana London
Los Angeles Madrid
Miami Mexico City
Moscow Mumbai
New York Oslo
Philadelphia Richmond
Riga San Francisco
Santiago Sao Paulo
Seattle Seoul
Seville Shanghai
Singapore Stockholm
St. Petersburg Sydney
Tallinn Tokyo
Toronto
Vilnius
Turin
Warsaw
SBI Capital Markets Limited is the exclusive
Indian representative of M&A International Inc.

Leveraging M & A International Tie-up
•For the fifth year

running M&A
International Inc.
leads the mid-
market M&A league
tables
•* Completed
transactions by
volume in 2006
(value US$ 5m -
250m)
•Source:
www.mergermarket.
com, M&A
International Inc.
Global mid-market league table

Thank You
the
world’s leading
M&A alliance
SBI Capital Markets Limited

Mergers & Acquisition and Corporate Advisory Group Contact Persons:
202, Maker Tower ‘E’, Cuffe Parade, Meenakshi Iyer
Colaba, Mumbai – 400 005, India. Vice President & Group Head
Meenakshi.Iyer@sbicaps.com
T# +91-22-22189166-69 F# +91-22-22186367/8332
Sameer Karulkar
Website: www.sbicaps.com Assistant Vice President
A Subsidiary of State Bank of India, India’s largest bank Sameer.Karulkar@sbicaps.com

SBICaps IndianApparelRetailSector Overview June2007

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Indian Apparel Retail Sector

the world’s leading M&A alliance June 2007 Strictly Confidential

Indian Apparel Industry - Overview

RMG* Market Size : 2005-06 Value Per cent

•India is very strong in niche segment and short-run fashion garments

Value (EUR Billion) Per cent

categorized as depicted by the diagram

– The Women’s Wear segment is estimated at

• segment has grown at a CAGR of 14% from 2001- KIDS

Value (EUR Billion) Per cent

the world’s leading M&A alliance

the world’s leading M&A alliance Source: www.dipp.gov.in

FRANCHISING CASH & CARRY JOINT DISTRIBUTION MANUFACTURING

Franchising Joint Venture

• Business models can be categorized as following:

Manufacturing Distribution Branding

Brand owner may provide designs and/or raw materials

the world’s leading M&A alliance

the world’s leading M&A alliance

EXPORTS MULTI-BRAND OUTLETS or

the world’s leading M&A alliance

• Owned Stores / Exclusive Brand Outlets

the world’s leading M&A alliance

– ‘Multi-Brands Outlets’ or Shopping Malls

the world’s leading M&A alliance

the world’s leading M&A alliance

RETAILERS & MBO’s OWN STORES

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

1. Pantaloon Retail (India) Limited

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

Financial and Operating Performance 2006

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

• Future Expansion Plans

the world’s leading M&A alliance

Financial and Operating Performance 2006

the world’s leading M&A alliance

the world’s leading M&A alliance

Trent Ltd Infiniti Retail Ltd

Westside Star India Bazaar Landmark Croma

the world’s leading M&A alliance

Financial and Operating Performance 2005-06

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

Financial and Operating Performance 2006

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

the world’s leading M&A alliance

Financial and Operating Performance 2006

the world’s leading M&A alliance

the world’s leading M&A alliance