Falling margins in exports, RCG looks to retail expansion

Bangalore, May 9 (UNI) Falling margins in exports and fast growing domestic retail market is forcing apparel industry turn inward for its expansion.

Joining this bandwagon is the Royal Classic Group (RCG)-- owning Classic Polo and Smash brands. In a major retail initiative, RCG today launched a expansion drive in South India to set up 63 new outlets targetting 100 stores by December. This male fashion specialist already had 37 outlets across the country at present. Karnataka will have lion's share of 30 new outlets followed by Andhra Pradesh, Tamil Nadu and Kerala.

Company Executive Director R Sivaram told newsmen here that there was no point in looking at export growth in the post WTO scenario.

''We have been exporting apparel since 1991 with our export once accounting for 90 per cent of the sales in garments such as T-shirts, Shirts, cargoes, denim, jackets''.

''But with falling margins in exports, despite the increase in volume, we are now on a major expansion mode within the country.

Now we want to bring this ratio to 50:50''he added.

He said the retail chain would be run on franchise basis. This was mainly due to real estate prices shooting up in urban areas.

"We pay the salaries of sales personnel apart from training the entrepreneurs and investing in the establishment. this is our humble way of encouraging self employment, while at the same time expanding our footprint across the country. We invite even housewives who can concentrate on business in their free time," Sivaram said.

He said the company had a total sales of Rs.225 crore during the last fiscal of which Rs 110 crore was income from exports. "We have been growing at 65 per cent year-on-year basis and this year we have set a target of 100 per cent. We have invested Rs 70 crore in the our two facilities in Tamil Nadu to improve infrastructure in ginning, spinning knitting and dying capabilities" he added.

UNI