Louis Philippe: The Growth of a Super Brand in India

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"Our future competition is with strong international retail brands, we are not competing with small, home-grown brands. We have the product and manufacturing capability to compete with the Zaras ¹and Massimo Duttis ²of the world. We will fight for space with them..."³

-Ajay Ramachandran, business head for brands at Madura Fashion and Lifestyle in 2011.

Introduction Louis Philippe, the premium men's formal wear brand from the house of Madura Fashion and Lifestyle (Madura FL), closed the fiscal year ending March 31, 2011, with an annual sales figure of Rs. (INR)4 6.5 billion. For the Louis Philippe brand, it had been a fascinating journey right from the time it was introduced in 1989. The brand had soon emerged as the leading brand in men's formal wear. It focused on quality and on providing good value for the premium price it charged from customers. It launched sub-brands in the market for casual wear like Spiritus and Clubline to increase its market share.

Madura FL started to focus more on Louis Philippe after it acquired the global rights for the brand in the year 2000. Madura FL started to invest more in research and development, advertising, distribution, etc. of the Louis Philippe brand to facilitate its expansion both domestically and internationally. In 2001, Louis Philippe launched a super-premium range of branded apparel called 'Perma Press'. These were marketed as hundred percent wrinkle free and were a big hit among corporate users. In the year 2003, Louis Philippe launched another super-premium range of branded apparel 'Gods and Kings'. The 'Gods and Kings' collection was priced 100 percent above the other premium men's formal wear brands in India.

To continue its expansion spree, Louis Philippe entered the market for luxury apparel with the launch of a new sub-brand called 'Luxure'. Luxure was targeted at higher income people like senior corporate executives and CEOs. Priced from Rs. 3,500 to Rs. 9,900, the Luxure range aimed at capturing the Rs. 40 billion market for luxury apparel. The response for the Luxure brand was very encouraging and it contributed to nearly 15 percent of the total revenues in the stores where it was introduced by January 2010. Louis Philippe introduced premium footwear for men in 2010. The new footwear range was aimed at providing more choice in the footwear segment for Indian men who often shopped abroad for their footwear needs. Footwear was launched in all premium, super-premium, and casual segments.

Many analysts said Louis Philippe was a classic example of positioning and growing a new brand in the hyper-competitive apparel market. Madura FL set a target for Louis Philippe to achieve sales of Rs. 8.5 billion for the fiscal year 2011-2012. The company said it would follow some new strategies to achieve this growth like entering the smaller Tier II and Tier III cities. Louis Philippe was also planning to enter the market for female branded apparel and launch other male grooming products like perfumes, watches, denims, etc. At the same time, the brand was facing some problems due to more competitors entering the sector. The government had also levied a mandatory excise duty of 10 percent for branded apparel in the budget for the year 2011. The increase in the excise duty coupled with an increase in the cost of inputs due to high inflation squeezed the margin for apparel makers. In this scenario, industry observers said it remained to be seen whether Louis Philippe would be able to maintain its growth momentum.

Background Note - Next Page >>

1] Zara, headquartered in Arteixo, Spain, is a retailer of clothing and accessories. It is the flagship chain store of the Inditex group.
2] Massimo Dutti, headquartered in Tordera, Spain is a manufacturer of men’s clothing. It is part of the Spanish Inditex group.
3] SwethaKannan, "A Cut Above Home-grown," www.thehindubusinessline.com.
4] INR stands for the Indian Rupee. It is the official currency of the Republic of India. As of November 8, 2011 one US$ is equal to INR 49.05.

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