American jeans brands Lee and Wrangler are planning to transform their India businesses into omni-channel entities to drive growth, as the company that owns the brands aims to double its sales here over the next two years by extensively focusing on online channels.
US-based Kontoor Brands is moving its Lee and Wrangler business from a fully owned Indian subsidiary to a franchise model, and has recently signed a licensing deal with Bengaluru-based Ace Turtle, which mainly provides ecommerce solutions to traditional retailers.
People in the know said Kontoor is looking to shut a chunk of the India stores. The focus will now be on rapid growth of fashion products online, even as an increasing number of Indian consumers are purchasing online amid the pandemic.
“Our decision to partner with Ace Turtle in India is part of a strategy to adapt to a market that is increasingly online and ensure our much-loved brands are accessible to customers across the country through a combination of ecommerce and physical stores,” said John Gearing, managing director – Kontoor Brands Inc Asia Pacific. “The Indian retail market is evolving at immense speed and through this partnership, Lee and Wrangler gain a range of new and enhanced distribution channels, both online and offline.”
The partnership comes at a time when fashion and lifestyle brands including Puma, Levi’s and Jack & Joes have reported more than doubling of their online businesses, as consumers avoided malls and high streets amid fears of contracting Covid-19. Retailers said the pandemic has leapfrogged their online sales by five years and much of the growth is there to stick.
“Kontoor and our thoughts were very much aligned that the future of retail is omni-channel,” Ace Turtle chief executive Nitin Chhabra said. “So, we are changing the distribution to more towards omni-channel rather than offline and online distributions acting in silos. Now our stores will also become fulfilment centres for online orders.”
In the coming months, Ace Turtle will upgrade store technology to expose the brick-and-mortar inventories on the upcoming Lee and Wrangler webstores, as well as on ecommerce sites like Flipkart, Amazon and Myntra.
Lee and Wrangler currently source almost 90% of their apparels from within India and Ace Turtle plans to increase local sourcing to about 95% within a year. The supply chain will be ramped up towards omni-channel retailing with a quick turnaround time as per online demand.
As part of the restructure, Ace Turtle plans to do away with zonal and regional managers, and store managers will have direct reporting to the headquarters in Bengaluru.
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