Category: Denim Brands – Int’l

 Arvind Ltd – the flagship company of the $1.2 billion Lalbhai Group – has reinvented itself from a traditional ethnic fabric manufacturer to a dynamic company that professionalised its management and is now a force to reckon with in apparel brands and retail. Arvind Lifestyle Brands, a subsidiary of the Ahmedabad-based denim major Arvind, has acquired the business operations of British fashion retailers Debenhams, Next and American lifestyle brand Nautica in India from Planet Retail. Though India allows foreign retailers full ownership of their local operations in the single-brand segment, but many of these companies prefer to come into the country through the franchisee route.

The acquisition of Debenhams is considered  as significant mainly because it gives Arvind an entry into the luxury department store segment. Arvind plans to increase the current number of Debenhams stores in India from two to eight over the next three years. While through acquisition of Indian businesses of Next, Arvind will enter the fast-growing segment of the apparel specialty retail. It plans to increase the number of Next stores from three to 12 in the next three years. The licensing arrangement with Nautica will strengthen Arvind’s already strong position in high potential sportswear segment of the market. The company plans to set up additional 30 Nautica stores taking the tally to 41 free standing Nautica stores and 71 shop in shops in the next 3 year.

The company  plans to achieve Rs 500 crore (about $100 million ) revenues over the next five years from the current Rs 70 crore (about $14 million ) by investing Rs 150 crore(about $30 million )  in these three brands."

The company previously also has a large portfolio of brands including Licensed brands like Gant USA 1949,  Arrow, Cherokee , Energie , joint venture brands like Tommy Hilfiger, Bridge to Luxury, and own brands like Excalibur, Flying Machine, Ruf & Tuf, New Port University etc. The addition of  three more brands adds significantly to the portfolio of brands with Arvind.

At the same time,  Arvind  is also the 5th  largest denim manufacturer in the world. Arvind has since become one of India’s largest manufacturers of other woven fabrics as well, vertically integrated into garment manufacturing, and built one of India’s most impressive apparel brand portfolios.

Managing Director of Arvind -Sanjay Lalbhai – is working on creating the future growth engines for Arvind and setting it on its path to achieving the goal of being a $2 billion company in sales revenue by 2015 and these acquisitions are a part of this strategy.

Even on the social front, Sanjay Lalbhai  is actively involved in shaping Arvind’s engagement with society at large. Two such initiatives have flourished under his supervision. The first involves Arvind working with over 7,000 farmers to grow sustainable cotton across 60,000 acres of impoverished areas in Gujarat and Maharashtra. Through this project Arvind, is attempting to build a business model that integrates socio-economic benefits to farmers, a greener textile supply chain and financial benefits to industry.

The second initiative involves Arvind working with the municipal school system of Ahmedabad to build an education intervention model that helps impoverished students progress through the system and access opportunities for employment. Currently, this project benefits about 1,000 students each year.

Levi’s – the market leader suffered a reduction of over 38% in its profits in the quarter March – May ‘12. Various reasons for this are being given are mainly economic impact of recession -loss of sales in Europe, impact of strong dollar . It is also the first time in 2 years that the sales of the company declined in Asia – a region which had been powering its growth.  This would be particularly disturbing for the company since Asian countries are  not really so bad in denim sales.

Taking the cue from the Levi’s situation and as an indication of the industry trend, shares of several denim makers like Guess, True Religion , Gap , V.F corp etc  fell…

On the other hand we see some mid-sized brands doing well too.. Hudson Jeans , the California based brand is reported to be expecting a decent revenue of about $85 million this year with EBIDTA touching almost $15 million – a figure considered not so bad by the industry. Moreover , the company is exploring option of sale with valuations reported to be touching $150 million.
And another cool brand – J Brand from US touches a turnover of about $100 million and is , like Hudson Jeans, mulling a sale. Prospective buyers include The Jones Group, Li and Fung  as well as Kellwood Co. . It is noteworthy that larger retailers do buy the smaller , well established brands , at whopping prices as VF bought 7 for all Mankind at $775 million.  These sudden inclination to sell brands gives rise to speculation whether many of these brands feel that they have reached their peaks !

Anyway, on a positive note , some brands like Paper Denim & Cloth  are considering the current time an opportune one and considering relaunch later this year . The brand had lost its way somewhere in 2006 when it used to be quite popular .

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Winnipeg and Montreal were hotbeds of denim production before the productions were shifted overseas due to labour costs.  There used to be a large number of traders and manufacturers active in denim biz and used to import raw fabrics for jeans manufacturing.
Most of that has already disappeared . However, that is not to say that the jeans from Canada are no more visible. In fact, there are a few denim brands with Canadian origins and are strongly connected to Canada with designing and even manufacturing available in Canada.
Some of these brands are :

Fidelity Denim :

Jason Trotzuk designs them in Canada and they are actually manufactured in L.A . With the line being sold in important retail stores including Nordstrom, the brand is considered a success due to its novel designs and washes. 

Naked and Famous :

 
28-year-old Brandon Svarc, cuts its jeans out of Japanese selvedge denim but manufactures them in Montreal. The jeans have attracted attention due to the quality of fabrics . The jeans are all raw and the company says

“We keep all our jeans raw and simple. No washes, no embroidery, no gimmicks… just the best fabric in the world combined with modern fits. We have eliminated these costly (and in our opinion unnecessary) after-effects, and have stripped down our jeans to the core essentials. Now true denimheads and newcomers alike can enjoy these special fabrics at a reasonable price.

Here is an interesting animation video from the company http://www.nakedandfamousdenim.com/video.html

Naked and Famous is available in reputed stores like Barneys in NY to Printemps in Paris.

Silver Jeans – Silver Jeans have been making jeans since 1991 . In fact they had about 1200 sewing machines operating in Winnipeg till about a decade back.  They cover the moderate price range ground and have jeans selling at around $70- $100 . Though the production is now almost done overseas, the brand is essentially Canadian.

There are still a few more brands which have Canadian origin. Eg Parasuco denim still runs out Montreal and then there is Quintessential series which are assembled in L. A and cost around $300.
The Canadians have maintained their connection with the branding and designing and a bit of denim manufacturing  and it is possible that , like in US and UK, we may see the manufacturing side again picking up in the country..