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In-season Brands

If the year 2003 witnessed the birth of a lot of private labels, 2004 is seeing these very labels giving the brands a run for their money. These labels are the key drivers behind growth and market penetration across retail categories like apparels, groceries, etc.

Further, PRL has also focused on enhancing sales of its private label products, which in turn are expected to improve margins, PRL has also used the acquisition route for expansion, in businesses such as branded garments, and India's Marks & Spencer's franchisee.

The company has launched apparel categories under Pantaloon umbrella. This includes shirts, shorts under the Premium brand. It plans to launch 26 more products such as women apparel under the Premium brand.

Umbrella brands for other products are also on the anvil. They already sell belts, briefs, socks, ties under Pantaloons .The company's in-house brands have garnered a market share in the range of 25-40 per cent in its existing stores. They can earn whopping margins of around 55 per cent to 60 per cent on private labels. In women's wear, it is between 48 per cent to 50 per cent compared to around 35 per cent in branded gear.

The officials say that they can differentiate through private labels. They also believe that private labels give them more control over their shelves. They grouse that the big companies often squeeze supplies during peak seasons and festival time. As they compete head-on with brand manufacturers, private labels offer retailers better negotiation power with suppliers. Another reason for building up private labels is to induce store loyalty. In other words, with private labels not available anywhere else, if it clicks, then consumers return to the store.

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* Contributed by -
Manasi Panigrahi,
Pursuing MBA, Batch of 2006,
ICFAI Business School, Hyderabad.