Pepe Jeans plans to go big on shoes, innerwear categories, eyes Rs 900 cr turnover in 2017

When British denim wear brand Pepe Jeans came to India, the company never anticipated that India would turn into one of the most profitable markets for them, worldwide. In 2016, Pepe Jeans, India doubled its business to Rs 730 crore in retail value, and sold roughly 4.5 million pieces of apparel.
As business boomed, Pepe Jeans, India, under the able leadership of its CEO & MD, Kavindra Mishra, started expanding its product portfolio. From denim, the company branched out into kidswear- India being the only country where the brand runs six exclusive kidswear stores – accessories (sunglasses, bags and caps) and finally footwear categories, with plans for entering the innerwear sector underway.
In an exclusive interview with Indiaretailing Bureau, Kavindra Mishra talks about how his company successfully adapted its global image to the Indian consumer.
What is the strategy behind the decision to enter the non-apparel and innerwear markets?
As a brand, it’s important that we extend ourselves to all the usage categories that a consumer looks for, because that way you are a one stop solution, especially when a consumer is shopping for his day to day clothing needs. Traditionally Pepe, being a denim brand, is all about attitude and the good thing is that this attitude can be easily extended across categories with the Pepe DNA, being shown very strongly. Not all the brands can move that easily across various categories, one of the good things is that we do very well globally across these categories and the same philosophy is true for India.
Currently, we are importing shoes and have a strong line coming up. We are planning to start a big venture on shoes and innerwear this year itself. Besides that, we have various accessories (bags, caps, etc) we do a fairly good job in. Our store contribution for accessories is 4-5 per cent and these are our main areas for growth.
Fundamentally the expansion strategy comes from the fact that as a brand, we are able to extend well across categories. We have got this unique strength of design and consumer acceptability, and that’s the main reason, for planning the expansion of non apparels; we see a lot of growth there.
Throw some light on your business model?
Basically, we are wholesale driven company with a strong retail presence. We have 219 EBO’S as on date. We are amongst the most profitable companies in the country. One very important aspect of our model is based on appointing partners across regions who do distribution for us and who also open retail franchise stores. We have also got an approval on Single Brand Retail, so we are now also opening our own stores with the focus on the top five cities which will have our big format retail stores, for example- the Linking Road store in Mumbai and the recently opened store in Indira Nagar, Bangalore.
How many outlets do you have currently and how many more are you planning to open?
Total No of EBOs as on date:219
Total no of MBOs present in as on date:1012
Total no SISs as on date:229
Presence in LFS: Number of LFS stores: 332
We are looking launching in the following cities-Coimbatore, Saket, Bangalore and Chennai
What are your expansion plans? Any plans to explore new countries?
We are definitely looking at opening new markets based out of India. So, we are exploring opportunities in South East Asia as well as the Middle East. We are very confident that by the end of the next fiscal, we should be operating in other countries, with operations being based out of India.
How much is the company planning to invest to meet its expansion targets and from where are you planning to get these investments?
We are a cash-rich company so investments are not a problem. We have a list of stores which we want to open and with the ease in norms in Single Brand Retail now, we can open our big format stores. We are really focusing on having a strong presence in all key markets and at the same time we are also in process of identifying areas/cities where we are revamping our stores; so for instance if the store in a particular area is not profitable we’re shutting it down or turning it into a big format store. Recently, the Indira Nagar store in Bangalore was revamped into a big format store complete with our global design concepts. Our Linking Road store was revamped two years ago and with this process came the global concept that we launched-the ‘Pepe Jeans Custom Studio’.
We were the first brand in India to introduce a denim customization service. Pepe Jeans Custom Studio allows customers to step into the design seat and customize their denim in a few easy steps. First, pick a laser print to be tattooed on the denim. Next choose the fastenings – be it buttons, rivets or tacks. Then select the brush of the garment and where exactly you want it. Lastly, choose the colours you want your print to be in.
Pepe Jeans’s customization service empowers the customer with the opportunity for personalization; and therein lays a powerful tool that will revolutionize denim fashion in India. This service is available at our big format stores in the metros.
How do you keep up with evolving consumer behavior? 
We are a global brand, a lot of inputs we put in our strategy come from our in-house designers who work very close with the global teams, so we are able to work on trends and keep up with the fast moving culture. There are two parts when evaluating, one is global and the other is Indian; when it comes to identifying our Indian target group that is almost on par with the global consumers. They are a lot more evolved with their shopping choices, they are very fashion conscious and with the e-commerce boom, we have to be ahead of the curve in understanding the new generation consumers.
Fashion trends come and go very quickly, currently the big consumer trends is sustainability. We have made sure to incorporate this in our current SS’17 offering. Our denims have been made with these two properties:
1.TRUE FRESH
Idea – Say yes to fresh
Tech – Introducing true-fresh, That uses a revolutionary technology that neutralizes odour-causing bacteria, on contact, in turn keeping denims fresh for longer. Denims treated with this technology can be worn more often without washing. Even after days of Continuous use, the denim retains its freshness.
2. TRUE BLUE
Idea– The Love Of The Planet
Tech – A Pioneering denim collection with Zero Chemical Washes that radically reduce water consumption. This sustainable production process includes natural ozone gas treatments and sophisticated new three-dimensional lasers to create astonishing depts of indigo contrasts on jeans.
We also have included the Athleisure trend in the SS’17 collection, which blurs the lines between functional and causal, comfortable clothing. The true beauty of this trend is that it combines both the practical aspect as well as wearability. More than a trend, Athleisure marks the change in lifestyle, moving towards health consciousness, with relaxed and comfortable outfits.
What makes this unique is that Pepe Jeans has incorporated technology to make this last all day long with these two unique features incorporated in this high-performance fabric.  Athleisure is currently available only in but will soon be extended to Womenswear in the coming seasons.
The collection sees a host of colours from the basic blacks, whites, grays, navy’s to brighter shades of reds, blues and greens. The range consists of sweat pants, t-shirts and sleeveless tees.
How did demonetization affect your business?
Demonetisation is a great economic measure contributing to the growth of incredible India. The day after the announcement was made; a 49 per cent sales dip was reported. This was just a bump in the road. We salvaged the situation by offering added incentives, like extra 5 per cent off on use of credit/ debit cards which in turn helped us with the situation. This strategy helped us to narrow the dip to 25 per cent and resulted in a significant increase in sales. We anticipate this impact to continue until the end of this quarter. We believe that the move of demonetization coupled with GST will result in positive growth of the brand.
What was the revenue for the last fiscal and how much the company is expecting to clock current fiscal?
The last fiscal brought in Rs 700 crore, and we are aiming at Rs 900 crore this fiscal.
Please throw some light on marketing and promotion strategies of your brand.
Season after season, Pepe Jeans unveils fashionable international campaigns in India. Our marketing approach each season consists of a robust print and outdoor plan, supported by PR and social media. This season, Pepe Jeans was the sponsor of the children’s vertical of the prestigious HT Kala Ghoda Arts festival 2017. The idea behind the association with Kala Ghoda this year was to share our cool and iconic DNA with a wider audience.
The curation of workshops at the kids vertical was done with an intention to encourage young curious minds with interesting activities. We launched kidswear in the year 2015, as an extension of our casual wear offering.
Pepe Jeans London current campaign features the gorgeous Georgia May Jagger in the #WalkThisWay global campaign.
 
 
 
 
Many well-established foreign fashion players have entered India of late and have taken the consumer base by storm. What is your approach to the competition? 
Firstly, it is good that competition exists, because it makes us work harder. Secondly our approach is very simple. We stand for certain values and as long as we are able to make the consumer understand that his price product equation which is the value aspect that Pepe Jeans is offering is better than anybody else nothing else matters. Our consumers look for a great fit, quality products and a sharp pricing. Keeping in mind our end customers and staying true to our values of a cool denim brand is all that matters.
What is your pricing strategy?
It’s not about the price; it’s about the value always! What is the price, what is the product that you are buying…its always dependent on the value of the product. For example, you will see value in products that are on the expensive and the cheap side depending on what one wants.
Our pricing strategy is fundamentally based on the value we are offering to the consumers, the right product, the denims which are classic and also have a long shelf life.