Oswal Group is a premier \ntextile group of northern India having its corporate office at Ludhiana,Punjab. \nThe organisation has been for the last 40 years with spinning as its core competency. \nEarlier, they were part of the Vardhman Group but, after family settlement between \ntwo brothers in 2003, they named themselves as Oswal Group. The group is mainly \ninto spinning and dyeing of all types of yarn in different blends and manufacturing \nof garments. In 2004, Oswal group forayed into innerwear business under the brand \nof ‘Sensa’ with a view to cater to the growing ready-to-wear fashion apparel market. \nThereafter, the company renamed its retail innerwear business as ‘Straps’, offering \nlingerie, nightwear and maternity wear in 2006. And finally in 2008; Oswal Retail \ndecided to wind up its innerwear business and close down its 22 exclusive outlets \nof ‘Straps’.<\/p>
Market still in nascent stage<\/strong><\/p> As per \nreports of study conducted by leading retail consultants, Oswal group had pegged \nthe intimate wear retail market in India at a whopping Rs 2,200 crore and it was \nexpected that it would touch Rs 4,000 crore mark by 2009. The company had planned \nto capture five per cent share of this market by 2010. Commenting on the market \nscenario, Pradeep Seth, CMD, Stadia Group, says, "The main reason for suddenly \ndeciding to shut down all stores could be the financial losses in the business \nand not seeing the growth potential as was envisioned. The markets chosen for \nIndian Lingerie were probably right but there could be a reason that the more \nelite class still prefers to wear foreign brands which they purchase from abroad. \nThe other population may still be having cheaper options. However, the reasons \nfor closure could also be mismanagement."<\/p> Too many stores too \nfast<\/strong><\/p> Oswal group had ambitious plans to open ‘Straps’ stores across \nthe country. They opened 22 stores across Delhi, Gurgaon and Ludhiana and had \ncommitted investment of Rs 60 crore in this venture and planned to open 120 exclusive \nstores by 2009. It even tied up with several premium foreign intimate wear brands \nincluding Italian ‘Parah’, Rene Rofe, Wonder Bra and Women Secret of USA, Body \nLine and Moon Dance, which were sold through Oswal retail outlets.<\/p> Re-branding did not work<\/strong><\/p> Re-branding is an exercise \nrequiring meticulous plans and execution in order to retain its brand identity \nin the market. A company generally goes into re-branding after 10 years or more, \nwhen they feel that, with changing times, their brand too needs to be upgraded \nand consumer too needs the fresh look. Commenting on re-branding as a solution, \nDevangshu Dutta, Chief Executive, Third Eyesight, says, "The particular reasons \nbehind Oswal’s decision to close down the chain will be best given by the company \nitself. Normally, if a company wishes to sustain the retail business, specific \nstore-related decisions (changing the design, closing some stores, re-branding \netc.) can certainly help. On the other hand, if the management wishes to exit \nthe entire business for some strategic, operational or personal reasons, then \nthere are essentially two options: either to sell the business or to close it \ndown and book the losses."”<\/B><\/p> Lack of consumer interest<\/strong><\/p> With \neverything being right in order, one very important thing the company skipped \non was tile customer behavior commenting on consumer preferences, Mr Seth says \n“one reason is that more elite classes still prefer to wear foreign brands, \nwhich they purchase from abroad. Another reason lies in the possibility that people \nare still having cheaper options. However, reasons for closure could also be mismanagement. \n"<\/p> Possible solution<\/strong><\/p> Is there a possibility that \nthe company can be saved from such sudden closures of outlets? Can closing down \nof non- performing outlets or re-branding the brand be an option for survival? \nOr, is shutting down all the stores the only possible option? Talking about feasible \nsolutions to this problem, Shubranshu Pani, President Retail Advisory Services, \nJones Lang LaSalle Meghraj, says, "Normally the solution for such cases is \na merger possibility with a known chain that is either into similar business in \nIndia or merger\/acquisition by a foreign brand that may be looking for a foothold \nin India. Re-branding and shutting down of non-performing stores are solutions \nsometimes exercised by retailers to boost performance and cut losses. But many \na time, retailers resort to sales and discounting. Some retailers abroad also \nresort to rationalization of format-size.and merchandising. For example, many \n‘mom & pop stores’ and medical stores have started keeping other products \nlike CDs, stationery and FMCG products. Getting a store chain out of trouble needs \nintrospection and’ innovation. While reworking on space strategy is definitely \nrequired, it also calls for an overhaul in operations and client interaction." \nGiving his opinion, Mr. Seth says, "Normally, the solution to such cases \nis a merger possibility with a known chain that is either into similar business \nin India or merger-acquisition by a foreign brand that may be looking for a foothold \nin India." <\/p>\n","protected":false},"excerpt":{"rendered":" Oswal Group is a premier textile group of northern India having its corporate office at Ludhiana,Punjab. The organisation has been for the last 40 years with spinning as its core competency. Earlier, they were part of the Vardhman Group but, after family settlement between two brothers in 2003, they named themselves as Oswal Group. The […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3347","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n \n
Reasons \nfor stores’ closure <\/strong>
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