Report

MEGAMART (HYD) EXECUTIVE SUMMARY Objective:

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The main objective of the study is to collects data on Consumer perception or behavior about Megamart and to know how people are satisfied with shopping at Megamart so that necessary steps can (could) be taken in strategy formulation to improve company performance further. Scope: This report will be of great help for the marketer in order to formulate his retailing strategy. Technical data in the project: The data were collected through Questionnaire by personal interview method. a) Primary data b) Secondary data c) Silent Observation

Importance of the project: This project is important from marketer point of view as it shows the perception of consumer towards MEGAMRT. Limitation: This study has its limitation as the data were collected mainly from HYDERABAD area. Also the time of two months is not enough to go deep study on this problem.

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RETAIL OVERVIEWAccording to this year's Global Retail Development Index India is positioned as the leading destination for retail investment. This followed from the saturation in western retail markets and we find big western retailers like Wal-mart and Tesco entering into Indian market. India's retail industry accounts for 10 percent of its GDP and 8 percent of the employment to reach $17 billion by 2010. There are about 300 new malls, 1,500 supermarkets and 325 departmental stores being built in the cities very soon. A shopping revolution is ushering in India where, a large population between 20-34 age groups in the urban regions is boosting demand by 11.1 percent in 2004-05 to an Rs 23,308 purchasing power. This has resulted in huge international retail investment and a more liberal FDI. India tops the AT Kearney's annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment. Furthermore a report by PricewaterhouseCoopers foresees India and China to continue as the top sourcing hubs in retail and consumer sector in the coming years. The Indian retail industry in valued at about $300 billion and is expected to grow to $427 illion in 2010 and $637 billion in 2015. Only three percent of Indian retail is organised. Retailers of multiple brands can operate through a franchise or a cash-and-carry wholesale model. Retail is Indias largest industry, accounting for over 10 percent of the countrys GDP and around eight percent of employment. Retail in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. That said, the heavy initial investments required make break even hard to achieve and many players have not tasted success to date. However, the future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. Retailing in India is gradually inching its way to becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping. Modern retail has entered India as seen in sprawling shopping centres, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organised retail and growth in the consumption by Indians is going to adopt a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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increasing working-women population and emerging opportunities in the services sector are going to be the key growth drivers of the organised retail sector. Initially, this was about Indian corporate houses rolling out malls and supermarkets, but with Wal-Mart coming into the Indian market, the era of the superstore is dawning. Unlike the kirana stores that served us for decades, this new breed of retail chains is heavily dependent on IT. Wal-Mart, the worlds largest retailer, and Bharti Enterprises have signed a Memorandum of Understanding (MoU) to explore business opportunities in the Indian retail industry. This joint venture will mark the entry of Wal-Mart into the Indian retailing industry. The biggest competitor for Bharti-Wal-Mart is likely to be Reliance Retail, the retail wing of Reliance, which had planned to establish 10,000 stores by 2010. It had already opened 11 pilot stores under the Reliance Fresh format in Hyderabad. All these trends and developments present a great business opportunity for software and hardware vendors from across the globe. Indian solution providers are targeting this segment have reason to rejoice. For while organised retail occupies a miniscule two to three percent of the overall Indian retailing industry, that is poised to change. Continuing the robust growth of the organised retail in India, according to the Credit Rating and Information Services of India, the industry raked in US$ 25.44 billion turnover in 200708 as against US$ 16.99 billion in 2006-07, a whopping growth rate of 49.73 per cent. India has one of the largest number of retail outlets in the world. Of the 12 million retail outlets present in the country, nearly 5 million sell food and related products. Thought the market has been dominated by unorganised players, the entry of domestic and international organised players is set to change the scenario. Organised retail segment has been growing at a blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells, organised retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organised segment to account for 25 per cent of the total sales by 2011. A McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025. Commercial real estate services company, CB Richard Ellis' findings state that India's retail market is currently valued at US$ 511 billion. Banks, capital goods, engineering, fast moving consumer goods (FMCG), software services, oil marketing, power, two-wheelers and telecom companies are leading the sales and profit growth of India Inc in the fourth quarter of 2008-09. India continues to be among the most SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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attractive countries for global retailers. At US$ 511 billion in 2008, its retail market is larger than ever and drawing both global and local retailers. Foreign direct investment (FDI) inflows as on January 2009, in single-brand retail trading, stood at approx. US$ 25.18 million, according to the Department of Industrial Policy and Promotion (DIPP). India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As a democratic country with high growth rates, consumer spending has risen sharply as the youth population (more than 33 percent of the country is below the age of 15) has seen a significant increase in its disposable income. Consumer spending rose an impressive 75 per cent in the past four years alone. Also, organised retail, which accounts for almost 5 per cent of the market, is expected to grow at a CAGR of 40 per cent from US$ 20 billion in 2007 to US$ 107 billion by 2013. India has emerged the third most attractive market destination for apparel retailers, according to a new study by global management consulting firm AT Kearney. It further says that in India, apparel is the second largest retail category, representing 10 per cent of the US$ 37 billion retail market. It is expected to grow 12-15 per cent per year. Apparel, along with food and grocery, will lead the organised retailing in India. India has one of the largest numbers of retail outlets in the world. A report by Images Retail estimates the number of operational malls to grow more than two-fold, to cross 412, with 205 million square feet by 2010, and a further 715 malls to be added by 2015, with major retail developments even in tier-II and tierIII cities in India.

Marks & Spencer Reliance India is planning to open 35 more stores over the next five years, according to Mark Ashman, CEO of the company. The 51:49 joint venture between UKs Marks and Spencer and Reliance Retail Ltd already has 15 stores in India. Future Group has been restructured to test the new rules on FDI under Press Notes 2, 3 and 4 issued in February 2009. The company plans to bring in up to US$ 148.7 million in foreign investment. Although FDI is permitted only in single-brand retail and not permitted in multi-brand retail businesses like Future Group's, the conglomerate has created two layers of operations to take advantage of the three Press Notes that allow FDI up to 49 per cent in operating-cum-investment companies as long as they are owned and controlled by Indians. Carrefour SA, Europes largest retailer, may start wholesale operations in India by 2010 and plans to set up its first cash-and-carry outlet in the National Capital Region. Currently, Carrefour exports goods worth US$ 170 million from India to Europe, UAE, Indonesia, Europe, Thailand, Singapore and Malaysia. Jewellery manufacturer and retailer, Gitanjali Group and MMTC are jointly setting up a chain of exclusive retail outlets called ShuddiSampurna Vishwas. The joint venture, which plans to open around 60 stores across India by end of this year, will retail hallmarked gold and diamond jewellery. FASHION MANAGEMENT STUDIES


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Mahindra Retail, a part of the US$ 6.7-billion Mahindra Group, plans to invest US$ 19.8 million by 2010 to step up its specialty retail concept 'Mom and Me'.

Even though India has well over 5 million retail outlets of all sizes and styles (or non-styles), the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity.

It was only in the year 2000 that the global management consultancy AT Kearney put a figure to it: Rs. 400,000 crore (1 crore = 10 million) which will increase to Rs. 800,000 crore by the year 2005 an annual increase of 20 per cent.

Retailing in India is thoroughly unorganised. There is no supply chain management perspective. According to a survey b y AT Kearney, an overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is organised.

As much as 96 per cent of the 5 million-plus outlets are smaller than 500 square feet in area. This means that India per capita retailing space is about 2 square feet (compared to 16 square feet in the United States). India's per capita retailing space is thus the lowest in the world (source: KSA Technopak (I) Pvt Ltd, the India operation of the US-based Kurt Salmon Associates).

Just over 8 per cent of India's population is engaged in retailing (compared to 20 per cent in the United States). There is no data on this sector's contribution to the GDP.

From a size of only Rs.20,000 crore, the ORGANISED retail industry will grow to Rs. 160,000 crore by 2005. The TOTAL retail market, however, as indicated above will grow 20 per cent annually from Rs. 400,000 crore in 2000 to Rs. 800,000 crore by 2005 (source: survey by AT Kearney)

Given the size, and the geographical, cultural and socio-economic diversity of India, there is no role model for Indian suppliers and retailers to adapt or expand in the Indian context.

The first challenge facing the organised retail industry in India is: competition from the unorganised sector. Traditional retailing has established in India for some centuries. It is a low cost structure, mostly owner-operated, has negligible real estate and labour costs and little or no taxes to pay. Consumer familiarity that runs from generation to generation is one big advantage for the traditional retailing sector.

In contrast, players in the organised sector have big expenses to meet, and yet have to keep prices low enough to be able to compete with the traditional sector. High costs for the organised sector arises from: higher labour costs, social security to employees, high



MEGAMART (HYD) quality real estate, much bigger premises, comfort facilities such as air-conditioning, backup power supply, taxes etc. Organised retailing also has to cope with the middle class psychology that the bigger and brighter a sales outlet is, the more expensive it will be. The above should not be seen as a gloomy foreboding from global retail operators. International retail majors such as Benetton, Dairy Farm and Levis have already entered the market. Lifestyles in India are changing and the concept of "value for money" is picking up.

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India's first true shopping mall complete with food courts, recreation facilities and large car parking space was inaugurated as lately as in 1999 in Mumbai. (this mall is called "Crossroads").

Local companies and local-foreign joint ventures are expected to more advantageously positioned than the purely foreign ones in the fledgling organised India's retailing industry.

These drawbacks present opportunity to international and/or professionally managed Indian corporations to pioneer a modern retailing industry in India and benefit from it.

The prospects are very encouraging. The first steps towards sophisticated retailing are being taken, and "Crossroads" is the best example of this awakening. More such malls have been planned in the other big cities of India.

An FDI Confidence Index survey done by AT Kearney, retail industry is one of the most attractive sectors for FDI (foreign direct investment) in India and foreign retail chains would make an impact circa 2003.

Policy Initiatives 100 per cent FDI is allowed in cash-and-carry wholesale formats. Franchisee arrangements are also permitted in retail trade. 51 per cent FDI is allowed in single-brand retailing.

India retail industry is progressing well and for this to continue retailers as well as the Indian government will have to make a combined effort. India Shopping Malls Scope of the Indian Retail Market Indian Organized Retail Market Growth Factors in Indian Organized Retail sector SUMMER INTERNSHIP FASHION MANAGEMENT STUDIES (2008-10)

MEGAMART (HYD) Opportunities in Indian Organized Retail sector Challenges facing the Indian Organized Retail sector Role of Supply Chain in Indian Organized Retail Employment Generation by Indian Organized Retail Sector Indian Organized Retail Sector's Impact on Lifestyles Emerging Trends in Indian Organized Retail Sector Growth of Retail Companies in India Evolution of Indian Retail FDI in Indian Organized Retail Sector Formats in Indian Organized Retail Sector Consumer Durables Retail

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Retail space Driven by changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is expanding at a rapid pace. Mall space, from a meagre one million square feet in 2002, was 40 million square feet by end-2007 and was 60 million square feet by end-2008, says Jones Lang LaSalle's third annual Retailer Sentiment Survey-Asia. Alongside, Indian cities are witnessing a paradigm shift from traditional forms of retailing into a modern organized sector. A report by Images Retail estimates the number of operational malls to more than double to over 412 with 205 million square feet by 2010 and further 715 malls by 2015, on the back of major retail developments even in tier II and tier III cities in India.

Luxury Retail With consumers for luxury goods more in numbers than adult population of several countries, the Indian luxury retail market is estimated to leap-frog from around US$ 3.5 billion to US$ 30 billion by 2015, according to a survey done by AT Kearney. India's luxury market, estimated to be the 12th largest in the world, has been growing at the rate of 25 per cent per annum. Already Indians splurge US$ 2.9 billion on luxury assets, spend another US$ 953 million on luxury services and top it by buying luxury goods worth US$ 377 million. And with a rapidly expanding population of high net worth individuals, India could emerge as the next hub for luxury goods consumption. Consequently, a number of foreign brands including French Connection, Sanrio of Hello Kitty fame, Jimmy Choo, La Pearla and Calvin Klein among others have already lined up for SUMMER INTERNSHIP FASHION MANAGEMENT STUDIES (2008-10)

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permission to infuse foreign direct investment through the single-brand retail window. Kids' Retail When it comes to Indian children, retailers are busy bonding -- and branding:

Monalisa, the Versace of kids, is coming to India. International brand Zapp tied up with Raymond to foray into kids' apparel. Disney launched exclusive chains which stock character-based stationery. Pantaloon's joint venture with Gini & Jony will set up a retail chain to market kids' apparel. Swiss kidswear brand Milou is collaborating with Tirupur-based Sreeja Hosieries. French furniture brand Gautier is all set to hit the Indian retail market by the end of the year with a comprehensive range of furniture for children and infants. The UK based retail chain, Marks & Spencer, is launching its kids' wear categories in India.

Leading the kids' retail revolution is the apparel business, which accounts for almost 80 per cent of the revenue, with kids' clothing in India following international fashion trends. According to research firm KSA Technopak, the branded segment comprises US$ 701.7 million of the total kids' apparel market-size of over US$ 3 billion. Industry experts say kids' retailing will touch annual growth of 30-35 per cent.

Discount MallsEven as the organized retail market is starting to take off, there has been a concomitant surge in branded discount outlets in India. Top realtors and local retail chains are developing malls in regional boroughs, specifically to sell premium branded goods. At least 50 such malls are to come up in the next two years across the country positioned in the middle-to-the-premium end of the market. For example, Royal Palms is developing Orchard Road Mall in the western suburbs of Mumbai. Similarly, Akruti Nirman, which is planning to brand its discount malls in Kanjurmag, Ghatkopar, Mumbai and Thane as 'Cityworld', has decided to develop similar malls in Tier II and Tier III cities. Some of the other prominent discount retailers include Pantaloon Retail (India) Ltd's Brand Factory, Arvind Mills Ltd's Megamart andand Provogue (India) Ltd's Promart among others.

E-retailing The increase in the PC and internet penetration along with the growing preference of Indian SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping. An estimated 10 per cent of the total e-commerce market is accounted by etailing. With today's, net-savvy Indians making online purchases like never before, both the number and variety of products sold online has grown exponentially. According to the Indian Marketing Research Bureau (IMRB) and Internet and Mobile Association of India (IAMAI), the e-tail market is estimated to grow by 30 per cent to US$ 273.02 million in 2007-08, from US$ 210.01 million in 2006-07. In fact, there has been a continuous rise in the number of people accessing the internet. According to online research and advisory firm JuxtConsult's 'India Online 2008', there are over 49 million internet users in India. Significantly, internet penetration (as a percentage of population) has grown to 12 per cent, up 3 per cent from last year's 9 per cent.

Retail Franchising Along with e-tailing another perceptible trend in the growth of organized retail market has been the concept of retail franchising. According to industry estimates, retail franchising has been growing at the rate of 60 per cent in the last three years and is set to grow two-fold in the next five years. A number of companies have been taking this route driven mainly by the need to meet the increasing consumer expectations of quality, ambience and brand experience. In addition, this route also helps the big retailer players to rapidly foray into the tier II and III towns and rural areas. In fact, according to Mr Rod Young, Executive Director, DC Strategy, franchised outlets of leading brands in India are estimated to sell 20 per cent more than the company-owned ones. And with immense potential seen in this segment, the US$ 4 billion franchising industry is likely to see almost two-fold rise in the number of franchisees (from 0.2 million) by 2010.

Rural retail Led by the rising purchasing power, changing consumption patterns, increased access to information and communication technology and improving infrastructure, rural retail market is estimated to cross US$ 45.32 billion mark by 2010 and US$ 60.43 billion by 2015, says a study by CII and YES BANK. Consequently, Corporate India is already firming up concrete plans to tap the rural retail market, which is growing at double the rate of urban markets, with innovative schemes and human resource policies. And with 87 per cent of rural markets not having access to any sort of organised marketing and distribution, this segment has tremendous potential for growth. SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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International Retailers With international brands like Tommy Hilfiger, Esprit and Puma (that have entered the country) growing well over 100 per cent, many others are also planning to foray into the Indian retail market. India's vast middle class with its expanding purchasing power and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets.

The world's largest retailer, Wal-Mart, has tied-up with Sunil Mittal's Bharti Enterprises to enter Indian retail market. Microsoft's first shop-in-shop pilot has been launched with the Tata Group subsidiary Infiniti Retail's multi-brand consumer durables retail format, Croma. The Walt Disney Company, consumer product retailing arm of global animation giant, will soon add 135 new stores to its existing 15 stores. World's leading coffee chain, Starbucks' enters India through a tie-up with the country's leading multiplex operator PVR Limited. Apple Inc has entered into an exclusive marketing and distribution deal with Reliance Retail through "iStore by Reliance Digital". The UK-based international coffee chain, Costa Coffee, plans to double the number of retail outlets by the end of 2008. British retailer Marks & Spencer's has tied with Reliance Retail and plans to open at least 50 new stores in India over the next five years, with an initial investment of up to US$ 58 million. UK's largest home textile retail chain, Rosebys, which was acquired by Gujarat Heavy Chemicals in 2006, is set to foray into the domestic market this year with a slew of stores. German sportswear and Apparel Company, Adidas is going in for a major expansion across India, and plans to have a total of about 450 franchisee outlets in the country.

Some of the international players that have already entered India include McDonald's, Pizza Hut, Dominos, Levis, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp, Kodak, Medicine Shoppe among others.

Retail Reform The Government allows 100 per cent foreign direct investment (FDI) in cash and carry through the automatic route and 51 per cent in single brand. Besides, the franchise route is available for big operators. To further attract global retailers, the economic survey 2007-08 has suggested a share for foreign equity in all retail trade and 100 per cent in respect of luxury brands and other specialised retail chains. SUMMER INTERNSHIP FASHION MANAGEMENT STUDIES (2008-10)

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Retailing in India: a forecast:Future of organized retail in India looks bright. According to recent researches it is projected to grow at a rate of about 37% in 2007 and at a rate of 42% in 2008. It will capture a share of 10% of the total retailing by the end of 2010. According to the Union Minister of Commerce & Industry, Shri Kamal Nath, the organized retail sector is expected to grow to a value of Rs. 2,00,000 crore (US$45 billion) and may generate 10 to15 million jobs in next 5 years. This can happen in two forms- 2.5 million of these people may be associated directly with retailing and the rest 10 million people may be gainfully employed in related sectors that will be pulled up through the strong forward and backward linkage effects. However to compete in this sector one needs to have up-to-date market information for planning and decision making. The second most important requirement is to manage costs widely in order to earn at least normal profits in face of stiff competition.

Road Ahead According to industry experts, the next phase of growth is expected to come from rural markets, with rural India accounting for almost half of the domestic retail market, valued over US$ 300 billion. Rural India is set to witness an economic boom, with per capita income having grown by 50 per cent over the last 10 years, mainly on account of rising commodity prices and improved productivity. According to retail and consumer products division, E&Y India, basic infrastructure, generation of employment guarantee schemes, better information services and access to funding are also bringing prosperity to rural households. The rural market, product design will need to go beyond ideas like smaller sizes (such as single use sachets) to create genuinely new products, according to Ramesh Srinivas, national industry director (consumer markets), KPMG India. According to the Investment commission of India, the overall retail market is expected to grow from US$ 262 billion to about US$ 1065 billion by 2016, with organised retail at US$ 165 billion (approximately 15.5 per cent of total retail sales). India is expected to be among the top 5 retail markets in the world in 10 years. According to new market research report by RNCOS titled, "Booming Retail Sector in India", organised retail market in India is expected to reach US$ 50 billion by 2011.



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Number of shopping malls is expected to increase at a CAGR of more than 18.9 per cent from 2007 to 2015. Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50 per cent. Organised retailing of mobile handset and accessories is expected to reach close to US$ 990 million by 2010. Driven by the expanding retail market, third party logistic market is forecasted to reach US$ 20 billion by 2011.

Exchange rate used: 1 USD = 50.5047 INR



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Retail in HyderabadHyderabad Retail business sector is very large industry. This is both in terms of establishments and employees. In India, every year the Retail Industry generates 12,000 crores in terms of retail sales. The Retail Sector is also one amongst the largest worldwide business zones.

The retailing industry in Hyderabad is come into big Shopping Malls, and huge departmental stores and retail chains like Big Bazaar, Shopper Stop, and Metro. The employment opportunities in Hyderabad Retail are highly increased, and have nice financial rewards also. The big names in the Retail Marketing like Shopper Stop, Pantaloon Retail, Lifestyle, Subhiksha, Koutons, Bata, and Liberty are ready to invest huge money in Hyderabad Retail Industry. In the next two years thousands of jobs will be generated in this Hyderabad Retail sector. Integrated retailing like retail cum entertainment is booming at a great pace in the Hyderabad city. Growth in the field of online shopping is also an important factor that helps in enhancing the business in Hyderabad Retail Sector.

Overall, the Hyderabad Retail Business Sector has large opportunities for prospective business persons. With in the Hyderabad retail sector generating fair profits, it would be beneficial for investors to tap it exactly in the manner in which they want.



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ARVIND MILLS Arvind Mills is India's largest integrated textile company and operates across the entire value chain from design to fabric to brands. Arvind was the first company in India to bring international brands when they brought Arrow to India. Arvind now has licensing relationships with many international brands like Arrow, GANT US Polo & Cherokee. JV's with VF Corporation with brand portfolio of Lee, Wrangler, Nautica, Jansport, Kipling, Hero by Wrangler & Lee Riders, Tommy Hilfiger and most recently a JV with Diesel. In addition Arvind also owns a number of successful Indian brands: Flying Machine, Newport and Excalibur among others. Arvind also own & operates India's largest 75 outlet strong value retail chain under the name 'Megamart' Enriching lifestyle Styles may be short lived, but for well over seven decades Arvind has been defining and shaping many a collection and trendsetting styles across the ramps and retail outlets of the fashion capitals of the world. Arvind is today synonymous with a vast range of lifestyles products - be it fabrics or brands. Time and again we have been called to produce some of the finest fabrics and exacting dresses for some of the world's most quality conscious brands while evolving our own extensive brand portfolio. Brand portfolio Arvind is amongst a few organizations worldwide with a portfolio of brands that are distinctive and relevant across diverse consumers. At Arvind, brands work across multiple channels, price points and consumer segments. Own Brands Mainstream1.Excalibur 2.Flying Machine Popular1.Ruff & Tuff 2.New Port University Licensed Brands1.Gant 2. U.S.A. 1949 SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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Premium1.USPA 2.SansaBelt 3.Izod 4.Pier Cardin Paris 5.Arrow

Popular 1.Cherokee Joint Venture Brands 1.Tommy Hilfiger 2.Nautica Premium 1.Lee 2.Wrangler Popular 1.WranglerHero 2.Riders

The Evolution 1930 was a year the world suffered a traumatic depression. Companies across the globe began closing down. In UK and in India the textile industry in particular was in trouble. At about SUMMER INTERNSHIP FASHION MANAGEMENT STUDIES (2008-10)

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this time, Mahatma Gandhi championed the Swadeshi Movement and at his call, people from all India began boycotting fine and superfine fabrics, which had so far been imported from England. In the midst of this depression one family saw opportunity. The Lalbhais reasoned that the demand for fine and superfine fabrics still existed. And any Indian company that met this demand would surely prosper. The three brothers, Kasturbhai, Narottambhai and Chimanbhai decided to put up a mill to produce this superfine fabric. Next they looked around for state-of-the-art machinery that could produce such high quality fabric. Their search ended in England. The best technology of that time was acquired at a most attractive price. And a company called Arvind Limited was born. Arvind Limited started with a share capital of Rs 2,525,000 ($55,000) in the year 1931. With the aim of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning and weaving facilities in addition to full-fledged facilities for dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after establishment were Rs 45.76 lakh and profits were Rs 2.82 lakh. Steadily producing high quality fabrics, year after year, Arvind took its place amongst the foremost textile units in the country. In the mid 1980s the textile industry faced another major crisis. With the power loom churning out vast quantities of inexpensive fabric, many large composite mills lost their markets, and were on the verge of closure. Yet that period saw Arvind at its highest level of profitability. There could be no better time, concluded the Management, for a rethink on strategy. The Arvind management coined a new word for it new strategy Renovision. It simply meant a new way of looking at issues, of seeing more than the obvious and that became the corporate philosophy. The national focus paved way for international focus and Arvinds markets shifted from domestic to global, a market that expected and accepted only quality goods. An in-depth analysis of the world textile market proved an eye opener. People the world over were shifting from synthetic to natural fabrics. Cottons were the largest growing segments. But where conventional wisdom pointed to popular priced segments, Renovision pointed to high quality premium niches. Thus in 1987-88 Arvind entered the export market for two sections -Denim for leisure & fashion wear and high quality fabric for cotton shirting and trousers. By 1991 Arvind reached 1600 million meters of Denim per year and it was the third largest producer of Denim in the world. In 1997 Arvind set up a state-of-the-art shirting, gabardine and knits facility, the largest of its kind in India, at Santej. With Arvinds concern for environment a most modern effluent treatment facility with zero effluent discharge capability was also established. Year 2005 was a watershed year for textiles. With the muliti-fiber agreement getting phased out and the disbanding of quotas, international textile trade was poised for a quantum leap. In the domestic market too, the rationalizing of the cenvat chain and the growth of the organized retail industry was likely to make textiles and apparel see an explosive growth. SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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Arvind has carved out an aggressive strategy to verticalize its current operations by setting up world-scale garmenting facilities and offering a one-stop shop service, by offering garment packages to its international and domestic customers. of Lee, Wrangler, Arrow and Tommy Hilfiger and its own domestic brands of Flying Machine, Newport, Excalibur and Ruf & Tuf, is setting its vision of becoming the largest apparel brands company in India. The Lalbhais A Historical Perspective The Lalbhais can trace their descent from Seth Shantidas (c.1590-1659), who was a dominant figure in the business and civic life of the city. He enjoyed the patronage of the Moghul emperors to whom he was a trusted jeweler. Shantidas was amongst the prominent financers of his time as well. He played an influential role amongst the Jain community of his time, and it was because of his influence at the Moghul court that Shah Jehan confirmed the rights of the Jains over the ancient shrines of Shetrunjaya. His grandson, Khushalchand, (1680-1748) too occupied a place of prominence in the business and social life of the city. He saved the city of Ahmedabad from the marauding Maratha army in 1725 by paying a ransom of Rs. 5 Lakh on behalf of the whole city. For this act the grateful mahajans promised in perpetuity, a small amount collected as town duties on goods entering the city to Khushalchand and his family, and the title of Nagarsheth was bestowed upon him . The current surname, Lalbhai, is derived from Lalbhai Dalpatbhai the great great great grandson of Khushalchand. Lalbhai was born around the time when the first textile factory in the city went into production. The first manufacturing company of the Lalbhai family, Saraspur Manufacturing Company was established in 1897. It started with producing cotton yarn. During the intensifying Swadeshi movement the second company Raipur Mills was established in 1905. Due to untimely death Lalbhai Dalpatbhai the reins of his businesses were handed over to his young sons including a seventeen year old Kasturbhai Lalbhai. Kasturbhai started the first large scale textile mill under the name of Asoka Mills in 1920 with a capital of Rs.12 Lakh at a time when the largest mills in the region were built with not more than Rs. 5 Lakh. 1930-31 saw the resurgence of second Swadeshi movement coinciding with the great depression. While different entrepreneurs reacted to the situation differently Kasturbhai saw this as the decade of prosperity and growth and established the flagship Arvind Limited in 1931 with an authorized capital of Rs. 25.25 Lakh. Kasturbhai had also floated mills for families of his three sisters under the name of Aruna Mills in 1928 and Nutan Mills in 1931 and Ahmedabad New Cotton Mills in 1938. With the expansion Kasturbhai came to occupy the position of the biggest textile magnate in the country. Few groups could claim to have made such great strides during one of the worst periods in Indias industrial history. After a continuously successful period of four decades in the pre-independence era, the group entered into other fields such as dyes, pharmaceuticals, chemicals, etc. The first SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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diversification started in 1939 with Anil Starch Limited. Atul Products Limited was established in 1952 for manufacturing textile-related chemicals and dyestuff. Atul formed joint ventures with Ciba-Geigy called Cibatul, with American Cynamid called Cynamid of India and with ICI of UK called Atic Industries. As time progressed the JV partners separated amicably and these companies exist in India today as full representatives of these global giants. With the retirement of Kasturbhai and his younger brother Narottambhai from active business, the role of the patriarch fell on the shoulders of Arvindbhai. He along with his brother Niranjanbhai and his cousins Ashokbhai, Ajaybhai, Chinubhai and Vijaysinhbhai looked into the running of the te1tile mills, Siddharthbhai headed Atul Products, and Shrenikbhai, Anilstarch. The group took over a sick company called Ahmedabad Laxmi Cotton Mills Co. Ltd. and merged with Arvind Limited and the unit was renamed as Ankur Textiles. The unit currently under Arvind Products Limited is today the country largest organized player in the voiles market. The group also invested in Anup Engineering Limited engaged in fabrication and set up Amol Dicalite in collaboration with General Refractories Limited, U.S.A for manufacturing filter aids and perlite products. With the third generation of Lalbhais retiring from business Sanjay, Sunil and Samveg Lalbhai, the fourth generation of Lalbhais, now oversee all the businesses. Apart from the field of business the Lalbhais over generations have contributed to education, social and religious causes. Their contribution to education starting from Gujarat Vernacular Society in late 1800s to the formation of Ahmedabad Education Society, (1936), which governs 11 leading colleges and 6 schools, and 4 other educational programs. Kasturbhai Lalbhai played a key role in establishing the Physical Research Laboratory (1948), ATIRA(1947) and the famed IIM Ahmedabad (1961). The Lalbhai family has been closely associated with the Jain trust called Anandji Kalyanji Trust which is involved in propagating and maintaining Jain temples in western India. Shri Kasturbhai Lalbhai headed the trust for 50 years, followed by Shrenik Lalbhai for 30 years, and now, Samveg Lalbhai heads the trust. Sanjay Lalbhai heads Sharda Trust Arvinds CSR vehicle. Arvind is committed to upgrading the standard of municipal schools in Ahmedabad and work towards building a pool of bright employable youth.



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The Lalbhai Group has made significant monetary and management contributions to the following Institutions: EDUCATION PROFESSIONAL, CULTURAL, AND RESEARCH BODIES Ahmedabad Education Society Lalbhai Dalpatbhai Institute of Indology Ahmedabad Textile Industries Research Association (ATIRA) L.D. Engineering College L.D. Arts College Indian Institute of Management, Ahmedabad Gujarat University Mohinaba Kanya Vidyalay Rachana School Lalbhai Dalpatbhai Municipal School Lalbhai Dalpatbhai Bharatiya Sanskriti Vidya Mandir Consumer Education and Research Center

HUMAN DEVELOPMENT Sharda Trust Narottam Lalbhai Rural Development Foundation Chandraprasad Desai Memorial Foundation Blindmens Association Sankat Nivarn Samhiti

MEDICAL CARE AND RESEARCH

Gujarat Cancer Society Jiuraj Hospital Shaardaben Chimanbhai Minicipal Hospital Sharda School of Mentally Retarded Children Sudhir Chimanbhai Rehabilitation Center



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HISTORY 1931 Arvind Limited Limited is set up by three brothers Kasturbhai, Narottambhai and Chimanbhai Lalbhai with a share capital of Rs 2,525,000 (US$55,000) backed by state-of-the-art technology, with the aim to produce high-end superfine fabric. 1934

With sales reaching Rs 45.76 Lakhs, and a profit of almost Rs 3 Lakhs, Arvind establishes itself amongst the foremost textile units in the country. 1986

- An uninterrupted record of not missing out on paying dividend to its shareholders. - An established leader in fine & superfine cotton fabrics for Indian market. 1986

Renovision: First company to bring globally accepted fabrics Denim, yarn dyed shirting fabrics & wrinkle free gaberdines to India. 1987

- The largest zero discharge green efluent treatment plant in India. - Commitment to greener world

1987

- First company to bring International shirt brand Arrow to India - First company to start dedicated retail outlets for Arrow brand. - Awarded various awards for Highest exports and ISO

1989

Largest denim & shirting - 3rd Largest denim capacity in the world

in

South

Asia.



MEGAMART (HYD) 1997

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First Indian company to verticalise the cotton textile business from cotton fields to apparel retailing.

1997-1998

First company to introduce ERP SAP business solutions 2008

Company launches 'Megamart', now India's largest value apparel-retail chain

2008

Largest portfolio of International brands: Lee, Wrangler, Nautica, Jansport, Kipling, Tommy, Arrow, US Polo, Izod, Pierre Cardin, Palm Beach, Cherokee, hart Schaffner Marx

Value and vision The underlying theme running across the broad spectrum of all business activities at Arvind is that of enhancing lifestyles of people, across all diversities and demographics. To serve that end, the corporate vision for Arvind states: 'We will enable people to experience a better quality of life by providing enriching and inspiring lifestyle solutions'. PHILOSOPHY WE BELIEVE In people and their unlimited potential. In content and focus in problem solving. In teams for effective performance. In intellect & its power. WE ENDEAVOUR To select, train and coach people to obtain higher responsibilities. To nurture talent to build leaders for tomorrow's corporation. To reward, celebrate and activate all intellectual business contributions. WE DREAM Of excellence in all endeavours. Of mutual benefit and prosperity. Of making the world a better place to live in. We Make Things Happen.

COMAPANYS TRANSFORMATION



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History has been witness to the Arvind Groups commitment to excellence, innovation, perseverance and undying attention to customer and societal needs. As an organization, Arvind has successfully integrated diverse businesses, services and products, unified by a common vision - of enriching lifestyles. Founded in 1931, Arvind lost no time in establishing its position as one of Indias leading super-fine fabric manufacturers for the domestic market. And yet, Arvind has always felt the pulse of the market; welcoming change and reinventing itself for the challenges of a dynamic society and marketplace. This policy of change has fetched us well deserved results. Arvinds adoption of new-age fabrics has seen the Company emerge as one of the largest denim manufacturers in the world, while also bringing us global recognition for the manufacture of shirting, khakhi and knitted fabrics. A large and growing presence in the manufacture of ready-made garments - jeans, shirts and knits has further seen Arvinds rise as a one-stop solution provider for leading global and domestic apparel brands. Finally, the Companys direction and rapid growth in the branded apparel and retail business along with a more recent involvement in the growing of organic cotton, has consolidated its presence through the apparel value chain. Arvinds expertise is end to end; we apply exacting standards of innovation, design and service through the journey; from its origin as a fiber of cotton in a farmers field, all the way to its culmination as a satisfying shopping experience. And that, in fact is the feather in our cap.

Lifestyle FabricsSUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

MEGAMART (HYD) Denim Division Arvind Limited Naroda Road Ahmedabad 380025 Gujarat India Tel: +91-79-22203030 Fax: +91-79-22200267 e-mail : [email protected] Khakhi DivisionArvind Limited Santej Road , Near Khatrej Taluka Kalol , Dist Gandhinagar Gujarat - 382721 India Tel: +91-2764-281100/22 Fax: +91-2764-281177 Contact Person : Pranav Dave e-mail : [email protected] VoilesAnkur Textiles Outside Raipur Gate Ahmedabad 380 022 Gujarat India Tel: +91-79-25461191/95 Fax: +91-79-25454182 Contact Person : Brijesh Bhati e-mail : [email protected] Shirting DivisionArvind Limited Santej Road , Near Khatrej Taluka Kalol , Dist Gandhinagar Gujarat - 382721 India Tel: +91-2764-281100/22 Fax: +91-2764-281127 SUMMER INTERNSHIP (2008-10)

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MEGAMART (HYD) Contact Person : Pranav Dave e-mail : [email protected] Knits DivisionArvind Limited Santej Road , Near Khatrej Taluka Kalol , Dist Gandhinagar Gujarat - 382721 India Tel: +91-2764-281100/22 Fax: +91-2764-281060 Contact Person : Praney Mehta e-mail : [email protected]

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Lifestyle Apparel Knits Arvind Limited Santej Road , Near Khatrej Taluka Kalol , Dist Gandhinagar Gujarat - 382721 India Tel: +91-2764-281100/22 Fax: +91-2764-281060 Contact Person : Praney Mehta e-mail : [email protected] JeansArvind Limited 26/2 & 27/2 Kenchanahalli Mysore Road Bangalore - 560059 India Tel: +91-80-26999000 Fax: +91-80-26999299 Contact Person : Saurabh Samnol e-mail : [email protected]



MEGAMART (HYD) ShirtingArvind Limited #55 Puttappa Industrial Estate Mahadevapura Whitefield Road Bangalore -560048 India Tel: +91-80-41123900 Fax: +91-80-41123909 Contact Person : Maneesh Patel e-mail : [email protected] Arvind BrandsArvind Brands Limited Du Parc Trinity 8th Floor, 17, M. G. Road, Bangalore 560001 Karnataka India Tel: Fax: +91-80-41550111 CEO : J.Suresh e-mail : [email protected] Arrow : Contact Person : Mr.Rishi Vasudev e-mail : [email protected] Mega Mart : Contact Person : Mr.Venkat e-mail : [email protected] Flying Machine : Contact Person : Mr.Alok Dube e-mail : [email protected] HR : SUMMER INTERNSHIP (2008-10)

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+91-80-41550100


MEGAMART (HYD) Contact Person : Mr.Nagraj e-mail : [email protected]

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OUR PEOPLE Being an Employer of Choice is a rare feat. And Arvind accomplishes that by aiming to attract, retain and nurture talent. The development of the individual is all-important and as long as there is learning, there is job satisfaction. That explains Arvinds HR policy and its emphasis on learning and skill enhancement. Training calendars keep our people busy across businesses, encompassing technical, functional and behavioural modules. Training is imparted on the job, as well as through classrooms and seminars. Career and succession planning initiatives are implemented through role elevation and enhancement, evaluating inter company and inter unit opportunities, and special development plans for top talent. Arvind employs 20324 people as workmen and over 5296 people as management staff, making it one of the more prolific employers in the state.

Corporate Jayesh Shah Director & CFO Anang Lalbhai MD - Arvind Products Milind Hardikar Group President - Projects Lifestyle Fabrics Aamir Akthar CEO, Lifestyle Fabrics - Denim Susheel Kaul CEO, Lifestyle Fabrics - Shirtings & Khakhis Senthil Kumar CEO, Knits



MEGAMART (HYD) PD Chavda President, Lifestyle Fabrics - Voiles Lifestyle Apparel Senthil Kumar CEO, Lifestyle Apparel - Shirts , Jeans & Knits Brands & Retail J.Suresh CEO - Brands & Retail Anup Engineering Sanjay Lapalikar CEO, Anup Engineering Telecom Business Vipen Malhotra President - Arvind Telecom CHAIRMAN AND MANAGING DIRECTOR Mr. Sanjay S. Lalbhai

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He is a Chairman and Managing Director of the Company. He is a Science Graduate with a Master's degree in Business Management. He has been associated with the Company for more than 28 years. He also holds directorships in Arvind Spinning Ltd., Mauritius, Amol Decalite Limited, Mahindra Gujarat Tractor Limited, Torrent Pharmaceuticals Limited, Arvind Worldwide Inc., USA, Arvind Worldwide (M) Inc. and Arvind Overseas (M) Ltd.

DIRECTOR AND CHIEF FINANCIAL OFFICER Mr. Jayesh K. Shah He is a Wholetime Director with designation of Director and Chief Financial Officer of the Company. He is a Commerce Graduate and Chartered Accountant and has been with the company for more than 22 years. He has a distinguished academic career and extensive administrative, financial, regulatory and managerial expertise. He also holds directorships in various companies

OTHER DIRECTORS Mr. S. R. Rao (Nominee of EXIM Bank) He is a Nominee Director of EXIM Bank. He is a graduate from The Indian Institute Of Technology, Bombay. He is the Chief General Manager of EXIM Bank of India. He is also SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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on the Board of Global Procurement Consultants Ltd., Global Trade Finance Ltd., and Nagarjuna Oil Corporation Ltd. Mr. K.M. Jayarao (Nominee of ICICI Bank) He is a Nominee Director of ICICI Bank Ltd. He is a B.E. (Mechanical) and a Senior General Manager of ICICI Bank Ltd. He is also on the Board of Ispat Industries Ltd., Nagarjuna Fertilizers and Chemicals Ltd., Share Microfin Ltd., and Aban Loyd Chiles offshore Ltd. Mr. Sudhir Mehta He is a Non-executive and Independent Director of the Company. He is a Science Graduate from Gujarat University He was instrumental in the growth and progress of Torrent Pharmaceuticals Ltd. the flagship Company of the Torrent Group. He systematically expanded the power business of Torrent Group by acquiring significant stakes in the Torrent Power AEC Ltd. and Torrent Power SEC Ltd. and Torrent Power Generation Limited now merged with Torrent Power Limited and one among the few successful independent power projects in India. He has managed strategic alliance with leading international giants from U.K., Germany, France and USA. He is an Executive Chairman of Torrent Power Limited, Chairman of Torrent Pharmaceuticals Limited and Torrent Private Limited and a Director of The Torrent Power Transmission Private Ltd.

Mr. Tarun Seth He is a Non-executive and Independent Director of the Company. He has a master's degree in Arts (Sociology) from M.S University and ITP Harvard Business School, USA. He is a Management Consultant. He was a President of Bombay Management Association and a member of professional bodies like Indian Society for Applied Behavioral Science, Indian Society for Training and Development and Bombay Management Association. He is on Board of various Companies. He is a former faculty member of Motorola University and has trained Motoral managers in the US, Europe, Australia, China, Taiwan, Singapore and India. He is an independent and a non-executive Director of the Company. Mr. Munesh Khanna He is a Non-executive and Independent Director of the Company. Accountant from Institute of Chartered Accountants of India. He has 21 in Investment Banking from across the Industrial spectrum in India in Financial Restructuring and Resource Raising. In addition, he has experience in the Energy, Utilities and Telecom sectors. He is a Chartered years of experience the areas of M&A, also an extensive

Prior to joining Halcyon Resources & Management Consulting Private Limited, he was the Managing Director and Head of Investment Banking in DSP Merrill Lynch. Prior to this he SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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was the Country Head and Managing Director of Rothschild India and Partner- Country Head of Arthur Andersen Corporate Finance. He has advised Indian Lenders on the Restructuring of the Dabhol Power Project and LNG facility for a total value of US$ 1.9 billion. AXA on its joint venture with Bharati Group, Air Deccan on raising funds US$ 40m through Private Equity and IPO and many other significant transactions. He is a member of the Young President Organisation (YPO). He was also a Member of CII and a member of the Executive Committee of Federation of Indian Chambers of Commerce and Industry ('FICCI') and Co - Chairman of the Finance & Capital Market committee of FICCI. Mr. G.M.Yadwadkar (Nominee of IDBI) He is a Nominee Director of IDBI. He is a General Manager of IDBI, Ahmedabad. He is also on the board of Ecoboard Inds. Ltd. Pune, SJK Steel Plant Ltd., Hyderabad, Gujarat Alkalies & Chemicals Ltd., Vadodara and Gujarat Industrial and Technical Consultancy Organization Ltd.

CLASSIFICATIONS Lifestyle Fabrics The Fabric of a Global Society In a world without boundaries, Arvind fabrics are equally universal in their appeal. Arvind aims to enrich lifestyles globally, inspiring diverse customers with the beauty of their fabric. Denim There are many delightful features of Arvind denim: An annual capacity of 110 million meters; the position of 3rd largest producer of denim in the world; and an export network of 70 countries worldwide. Prominent products in this category include ring denim, indigo voiles, organic denim, bi-stretch denim and fair trade certified denim. This is apart from regular light, medium and heavy weight denims. They come in various shades of indigo, sulphur, yarn-dyeds, in 100% cotton and various blends. With a discerning clientele that includes GAP, VF Corporation, Levi Strauss, Abercrombie & Fitch, Calvin Klein to name a few, Arvind has to stay fashionably ahead. Their designers based out of Japan, Europe and USA create trend setting collections for the season, ensuring that heads keep turning for the Arvind name. Good from the outside and from within is the hallmark of a good product. Denim from Arvind offers reliability, quality and value-addition through services like shrink-film wrapping, bar-coded labeling of rolls, providing washed and unwashed shade blankets with every order, besides faster documentation. The facilities of Arvind Denim are accredited with ISO 9001, ISO 14001, OEKOTEX 100, GOTS, Organic exchange standard, FLO for fair trade and Lycra Assured. The labs are accredited by Dupont, Levi Strauss. SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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Further, theres excellent infrastructure, state-of-art technology and a dedicated customer counselling team that continuously resolve quality issues and provide desired wash results. Arvind also has in place an effluent treatment facility, which recycles waste water and converts denim waste to denim paper, in keeping with their eco friendly production process. As one of the largest denim producers in the world, Arvind caters to quality markets of Europe, US, West Asia, the Far East and the Asia Pacific.

ShirtingsArvind Shirting fabric has many aces up its sleeve. It is one of the most well-known products of Arvind Group, selling at a premium in the international market. It has an astonishing annual capacity of 34 million meters. Prominent products within this category include fabrics with non-iron properties, mechanical finishes, printed fabrics apart from the cotton and cotton blends in Linen, Lycra, Polyester, Modal, Silk etc. with varieties in yarn dyeds and solids. Further, Arvind has a unique plant for manufacturing very light weight indigo dyed fabrics in yarn dyed and solids for top weights. Arvind Shirting has a liquid ammonia based fabric processing plant and a state-of-the-art print house a first for India and one of the few in Asia. The clientele for the product include names like Polo, Ralph Lauren, ESPRIT, GAP, FCUK, Zara, Pull & Bear, Louis Philippe, Van Heusen, Allen Solly, Color Plus, Parx and Park Avenue. Backed by the latest technology and state-of-the-art equipment, every stage of the production process, right from spinning of the yarn to final processing and testing of the fabric, ensures that stringent quality standards are met and products remain eco-friendly. The plant is equipped for spinning company, lycra and super fine yarn up to 170s count. This is in addition to an existing state-of-the- art yarn dyeing facility, automatic drawing in unit and an automated fabric inspection and packing facility. And if that wasnt enough, the division has the largest sampling plant in India for speedy churning out of desk looms and yardages for customers. Plus, theres additional support from an in-house design studio and a team of designers, who in turn get continuous inputs on latest international trends from designers based in Italy and the UK.

KhakiThe many virtues of Arvind Khaki merit your undivided attention: An annual capacity of 21 million meters which facilitates the launch of two new collections annually; and the distinction of being the only khakis division in South East Asia to do so.



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The division provides the finest fabrics in the variants of 100% Cotton, Cotton Rich Polyester Blend, Cotton Lycra, Cotton Tencel, Cotton Linen, etc to name a few. The division has an integrated plant with weaving and processing facilities. The most prominent products in this range include Chinos, Canvas, Ribstop, HBT, Tussore, Cavalry, Structures and Dobbies. Its easy to see why the most discerning customers flock here: The exalted list includes GAP, J Crew, Polo Ralph Lauren, Abercrombie & Fitch, Banana Republic, Ann Taylor, Liz Clairborne,(US), Marks and Spencer, Pull & Bear, Benetton, Grotto Gas, Diesel, Debenhams, (UK), Madura Garments, and Color Plus (India). To satisfy such quality conscious customers, the khaki division has a testing and Quality Control Laboratory, and a Product Development Cell, which not only undertakes valueengineering of the existing products but is also involved in creating new weaves, blends and dyeing and processing techniques. The plants are certified by OEKO TEX, Lycra, Teflon. Laboratory accredited by Marks and Spencers, Next, Dupont, Levis, INVISTA. KnitsArvinds knits department has an annual knitting capacity of 10,000 tons. Apart from the basic knitting capabilities (jersey, pique, rib, and interlock), Arvind has mastered specialty knitting techniques such as yarn-dyed autostripers, jacquards, and stretch fabric. The knits vertical has a fabric dyeing capacity of 6500 tons per annum and yarn dyeing capacity of 3500 tons per annum. It has the ability to process both tubular and open-width fabric and offer specialty finishes like mercerization, singing and various forms of brushing and peaching. The department also boasts of a state-of- the art print shop equipped with fully automatic placement printing capabilities.

VoilesArvind is the uncontested market-leader in the manufacture of voiles, with a production capacity of 33 million meters per annum. Arvinds voiles are primarily used as blouse material and are sold in the domestic market through an impressive network of 150 dealers, reaching over 5000 retail outlets throughout India. High quality Swiss voiles are exported to Switzerland, Sri Lanka and countries in the Middle East.

Lifestyle Apparel Ready to wear ready, ready to get noticed. The manufacture of ready-made garments has emerged as a key business area for Arvind, enabling us to become a one-stop shop for leading apparel brands across the globe. Arvind garments receive design inputs from Studio Arvind, which has highly creative designers from the world over, hard at work at the drawing board. Its no wonder that Arvind has effectively captured the imagination and fancy of diverse and discerning customers; becoming the SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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preferred wear - be it in boardroom dressing or campus classics or just plain affordable fashion. Arvind has successfully enhanced lifestyles across profiles - the conformist, the modernist and the rebel are each happy to be Arvind customers. JeansArvind boasts of the largest ready-made Jeans facility in India with an annual capacity of 9 million pieces. Our key customers include GAP, VF Corporation, Ben Sherman, ESPRIT, FCUK, Guess among many others. The facility is equipped with a state of the art laundry, which offers specialty washes in addition to the basic stone, enzyme and bleach washes. We are capable of specialty finishes like hand sanding, sand blasting, whiskers with laser and hand; garment tinting, spraying, brushing, grinding, and permanent creasing and coating. Key automations like the cylindrical feed of the arm, loop attach machine, pocket attach machines etc. ensure the highest efficiency. The product mix includes innovative products like recycled jeans, organic and fair trade jeans, and various performance finishes. ShirtsArvinds ready-made shirt capacity stands at 4 million pieces per annum and is set to grow. With the support of Studio Arvind, the facility produces shirts of the highest quality for brands such as ESPRIT, Mexx, Next, and FCUK among others. The factories are designed for the most efficient material flow and host key automations like auto-welt pocket machines, pneumatic bottom hem machines, and various special attachments. The facility is equipped with a laundry designed to offer all kinds of wet and dry washes and performance finishes. KnitsServicing customers that include Marks and Spencer, Reebok, Adidas, Hanes Brands and FCUK among others, the ultra-modern knits garments facility has a production capacity of 9 million pieces per annum. The facility, designed on the principle of straight line material flow, boasts of a multi-skilled work force and key automations such as the unit production system to ensure the highest productivity. The product portfolio includes mens and womens tee shirts, mens and womens polo shirts, golf polos, full placket shirts, and training wear. The unit is capable of producing innovative products like climate control apparels, variety of printed apparel, fair trade and organic apparel and a variety of performance finishes. Arvinds ready-made garment portfolio of Jeans, Shirts and Knits is ready to grow, and will soon include Khakis as well. RetailscapeFor over four decades Arvind has been at the forefront of redefining retail experiences in India. We understand the constantly evolving aspirations of Indian customers like few others do. Our retail innovations and initiatives are driven by combining our global perspective with local insights. With the countrys largest network of retail outlets addressing virtually every segment of the market, Arvind is the lifestyle gateway to India.



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Leader in Value Retail Arvind had a mega vision that went on to becoming a revolution in value retailing. A revolution called Mega Mart. Mega Mart offers a unique retail experience, combining a premium ambience with amazingly low prices. A pioneer in this category, Mega Mart has penetrated into tier 2 & 3 cities and has opened over 120 stores in the last two years. These stores are across various size formats giving customers an international experience in value retailing. CONSTANT INNOVATION Arvind has a strong Research and Development focus on process improvement, cost reduction and new product development. This is evident in the fact that Arvind continuously modifies its production process to enhance flexibility on the use of various types and quality of cotton. To further meet customer needs, Arvind has also introduced a new dyeing and processing method for denims. State-of-the-art technology and equipment have made Arvind one of the top three producers of denim in the world, paving the way for the Company to emerge as a global textile conglomerate. This cutting edge position comes to Arvind courtesy technologies such as Open-end Spinning, Foam Finishing, Mercerizing, Slasher-dyeing, Rope-dyeing, Air-Jet, Projectile and Wet Finishing. Its only natural that Arvind quality fabrics are in high demand in the markets of Europe, US, West Asia, the Far East and Asia Pacific.

The Arvind Organic Cotton Growing Project Arvind is committed to support and develop models that bring sustainability to the production of its most valued and extensively used raw material. Cotton farming has traditionally relied extensively on the use of chemical fertilizers and pesticides that are harmful to the environment. Arvind is working with over 1000 small and marginal farmers in the Vidharb region of Maharashtra to grow organic cotton, without the use of any chemical inputs. The relationship works on the contract-farming model, wherein Arvind provides the farmers know-how on organic farming, and a guarantee to buy back the cotton produced directly from the farmer. A dedicated team of Arvinds organic farming experts provides constant technical support for farmers in the form of weekly consultation visits, practical demonstration of composting and organic pest management methods, and village-level SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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training programmes on all aspects of organic farming. In non-irrigated farmland of Vidharb, which has poor quality soils, organic practices do not lead to any drop in yield. The farmers can thus avail of the full benefits arising from a premium paid to them for conversion to organic farming practices, a reduction in input cost by obviating the need for chemicals, liquidity brought in by Arvinds 7-day payment schedule, an enhanced knowledge base and the elimination of the exploitative practices of middlemen. Arvind, in return, gets an assured source of high quality organic cotton. Not only is the project mutually beneficial to both Arvind and the farmers, but is also a scalable model that ensures the congruence of economic and environmental interests.

Organizational hierarchy:Business Head

Product Manager

Product Manager ( Suits)

Designer

Marketing Manager

Shirts, Knits, Casuals, Accessories

Assistance Manager

VM

Business Manager Manager SCM SUMMER INTERNSHIP Retail (2008-10)

Sourcing Manager FASHION MANAGEMENT STUDIES

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Retail Planner

Executive SCM

Customer service

Fabric

Trims

Knits

Prod.

In the happening world of retail, here's a promising new model. Arvind Brands has reconceptualised the format of its popular factory outlet-cum-seconds' store chain Megamart. The new-look Megamart won't be a factory seconds' store at all. In fact, it will look much like a modern fashion store and will come with defect-free apparel. The regulars wouldn't have to despair either. Because Megamart's biggest attraction - the discounts - will remain. The new Megamart has a bright new logo. In-store, the boxes stuffed with clothes are being replaced with brightly lit quality racks on which garments are neatly arranged. Trial rooms are being introduced. The staff is being retrained to become more customer friendly. Above all, the store is being imbued with a youthful look with the use of more colours, music and even a dance floor. The discounts continue because the products are marketing seconds. In other words, they are not fresh from the factory, but have remained on other store shelves for a little too long. ``Fashions change so fast that the shelf life of apparel is barely two to three months today. What's not sold in that period will come to Megamart. Not only will there be no defective pieces, we'll also keep out soiled clothes. In essence, Megamart will be value stores with good SUMMER INTERNSHIP FASHION MANAGEMENT STUDIES (2008-10)

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brands and products and an environment that's totally entertaining. And we hope to attract a whole new segment of people with this change,'' says Ramachandran, head of Megamart Operations. Megamart, of which there are 20 across the country and accounts for about 15 per cent of Arvind Brands' sales, will also create and stock brands of its own. Thus, in addition to Arvind brands like Lee, Arrow and Wrangler, the chain already stocks the newly introduced brand AXS. AXS consists of apparel designed from surplus export fabric from parent company Arvind Mills. Ramachandran says the company is able to give styles in AXS that are not available in its other brands. The popular apparel discount chain Megamart owned by the Arvind Mills may soon acquire a new separate identity as its likely to spin off from the parent company with help from an outside investor. This plan is said to be a part of the significant rebuilding of the Arvinds brands and retail business that estimated to touch a turnover of Rs 450 crore this year. It is learnt that Arvind Mills could either seek hauling up its brands and retail operations into two separate units or into a single separate body embodying both businesses. However, the probability of establishing a retail company under the discount fashion store chain, Megamart seems more credible. Industry insiders reveal that investigatory talks with private equity investors is on though the spin-off plans may gain impetus only next year. Even though Megamart is being seen as the vital retail growth driver in the coming four years the parent company, Arvind Mills, is aiming to derive income of about Rs 2,000 crore from the value chain format by the conclusion of financial year 2011. It is being stated that Arvind Mills may eye premium formats to enhance its retail operation. Officials from the company have, however, refrained from divulging further details about the project for the time being. The present revenues of Megamart could be in the Rs 130 - 150 crore bracket. So the spin off may come at a time when the companys income has escalated to around Rs 250 - 275 crore in the following 12-18 months. However, Arvind Mills is concentrating on growing Megamart into an Rs 2,000 crore body by the year 2011. For this, it will need about 2 million sq ft of retail space in India. At the moment, it has 2.5 lakh sq ft retail space in its name. In the fourth quarter of the current fiscal, Arvind Mills is projected to open huge format Megamart stores in Chennai, Pune and Hyderabad. The space in these stores may be between 50,000 sq ft and 1,00,000 sq ft in size, housing about 80 to 100 brands. Megamart, which until now only sold Arvinds own or related brands, will henceforth invite products of other competing companies too. Its being viewed as a move against Pantaloons Brand Factory in the value fashion sector.

Arvind Mills Ltd is introducing Super Stores under its Megamart retail model. SUMMER INTERNSHIP FASHION MANAGEMENT STUDIES (2008-10)

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To begin with, the company will set up two Super Stores of 40,000 sq ft each at Hyderabad and Chennai next year. While our discount store Megamart is of 5,000-7,000-sq ft area, Super Store will be a large format retail outlet of 40,000-sq ft area. The format will also act as a thrust to sell our private labels. We sell a combination of discounted apparels and private labels because we realise that selling only discounted apparel does not do justice to the overheads, he said. The discount will vary based on sourcing. If the apparel is one season old, it will have a certain discount. If it is damaged, it will have more discounts, adding that the store will help brands such as Lee, Wrangler, Arrow and Ruf & Tuf among others, to sell surplus stock. The company currently runs 50 Megamarts and plans to set up 50 more in the next two years. The retail business contributes to one-third of Arvind Mills total business and is perceived as the largest growth area. Most of the stores will come up in tier-II and -III cities. To fund the expansion, the company has announced the issue of 5,06,00,000 preferential allotment of warrants for Rs 263.12 crore to promoters. The company is looking forward to expand its retail and brands business and trying to manage the challenge in its core fabrics and garments business, against the backdrop of the rising rupee. There is requirement of funds for the growth of the business as well as a need to augment the net worth. It is unwise to fund our brands expansion with debt capital because brands have a long gestation period. Hence, we decided to raise the money through the equity channel. The company reported revenues (net sales) of Rs 1,844 crore in the last fiscal. Its shares closed at Rs 61.90 on Friday, up 6.36 per cent from the previous days close. A retail venture of Arvind Limited, India's largest integrated textile manufacturer and a leading branded apparel manufacturer& retailer, Megamart is a pioneer of the value-retailing concept in India. Megamart arrived on the scene at a time when multi-brand discount outlets were still an unheard of phenomenon and changed the rules of the retailing business in India. By keeping overheads and other costs to a bare minimum, it was able to pass on maximum savings to customers. Today, Megamart is the largest player in this segment and has a network of 100 Megamart stores spread across 41 cities in India and 1 Megamart Outlet Centres each in Chennai and Pune soon to be launched in Bangalore. The Outlet Centre has on offer more than 130 of the top brands at fabulous discounts and offers throughout the year.



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Exchange policy Exchange within 15 days of purchase provided Items to be exchanged are intact, unused and in good condition along with original megamart barcodes. Original invoice is produced as proof of purchase. No cash refunds.



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Missing categoriesAs suggested by the customers they want the following things to be added to the store Kids wear section. Womens wear section(much brands are not available). Womens accessories section. Two to three stores does not have brands like wrangler and lee. Insufficient merchandise in some of the good brands. Prices on merchandising tag are written without VAT which sometimes creates confusion.



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Customer SatisfactionIs the individuals perception of the performance of the product or service in relation to his or her expectations. Customers have drastically different expectations of an expensive French restaurant and a McDonalds, although both are part of the restaurant industries. This concept is a function of customer expectations. A customer whose experience falls below expectation will be dissatisfied. The achievement of satisfaction is an active, dynamic process. The satisfaction process often has a strong social dimension. The linked levels of customer satisfaction with customer behavior identified several types of customers: LOYALISTS- completely satisfied customer who keep purchasing SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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APOSTLES- completely satisfied customer whose experiences exceed their expectations and who provide very positive word of mouth about the company to others. DEFECTORS- who feel neutral or merely satisfied and can switch over to other store easily. MERCENARIES- very satisfied customers but who have no real loyalty to the company and may defect because of a lower price elsewhere or on impulse. Satisfaction High Low to Medium High Loyalty High Low to Medium Low to Medium Behavior Staying and Supportive Unhappy and May leave Coming and Going

Loyalists/Apostles Defectors Mercenaries

The five dimensions that customers consider while evaluating service quality are: Tangibles: the appearance of physical facilities, equipments, personnel and communication materials. Reliability: ability to perform the promised service dependably and accurately. Responsiveness: willing to help customers and provide prompt service. Assurance: knowledge and courtesy of employees and their ability to inspire trust and confidence. Empathy: caring, individualized attention provided to the customers.

The various parameters in the above five dimensions are: Reliability: 1. 2. 3. 4. 5. Providing services as promised. Dependability in handling customers service problems. Performing services right the first time. Performing services at the promised time. Keeping customers informed about when services will be performed.

Responsiveness: 6. Prompt service to customers. SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

MEGAMART (HYD) 7. Willingness to help customers. 8. Readiness to respond to customers request. Assurance: 9. Employees who instill confidence in customers. 10. Making customers feel safe in their transactions. 11. Employees who are consistently courteous. 12. Employees who have the knowledge to answer customer questions. Empathy: 13. Giving customers individual attention. 14. Employees who deal with customers in a caring fashion. 15. Having the customers best interests at heart. 16. Employees who understand the needs of their customers. Tangibles: 17. Modern equipment. 18. Visually appealing materials associated with the service. 19. Convenient business hours.

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ZONE OF TOLERANCE The concept of zone of tolerance has been discussed by many authors in the services management and customer behavior literature in recent years. Essentially it proposes the customers bring to a service encounter a set of expectations that are related to desired servicethe level of service that the customer hopes to receive- and adequate service- the level of service that the customer is prepared to accept. In between these two levels of services lies the zone of tolerance.

Desired service SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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Zone of Tolerance

Adequate service The implications of zone of tolerance are important are important to those companies which are trying to improve their service quality. When the customer perception of service quality falls within the zone of tolerance, even if it is close to the desired level of service, mere satisfaction is the result.

DRIVERS OF CUSTOMER SATISFACTION MODEL

Respect Appreciation Recognition Felling of value

+

Emotional Elements

-

Confusion Frustration Disappointment Neglect

Better Treatment Friendliness INTERNSHIP SUMMER Helpfulness (2008-10) Courtesy

Rudeness Interaction FASHION MANAGEMENT STUDIES Lack of caring with the Mistreatment Organization Disgruntlement

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+

-

On time delivery Accuracy Access to information

+

Technical Performance

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Delays Stock outs Waiting lines System failure

Delivery Warranties Payment options Longer hours

+

Process and Support

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Inflexibility Complexity Red tape Stupid rules

Product features Product quality Bells and whistles

+

Core product On Service

-

Price

DRIVERS OF CUSTOMER SATISFACTION Core product is the essence of the offer. This is the most basic of the things being offered to the customer and the one other that affords the services provider the least opportunity to differentiate or add value. Support services and systems-include peripheral that enhances the provision of the core product or service: delivery and billing systems, availability and access hours of service, level of staffing, communication of information, inventory system repair, help lines, and other programs that support the core. A customer can be dissatisfied with a service provider even though he or she receives a n excellent core product. SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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Technical performance- deals with whether the service provider gets the core product and the support services right. The emphasis is on performing in manner that was promised to the customer. Elements of customer interaction- is where the company meets the customer in person. This level is the way the service provider interacts with customer, through either a face to face service in counter or technology based contact. Company should focus on the interpersonal interaction between customers and employees. It indicates the importance of meeting and greeting customers positively in face to face environment and also while dealing through technology. Emotional elements- the affective dimensions of service- it means how we make the customer feel. The customer may be satisfied with all the above mentioned aspects but his business may be lost because some comment from staff member or because of some other thing that may not even be noticed by staff members. Considering these levels, we should keep the following observations in mind Things that the company and its employees provide and do at each level take on progressively more importance in terms of their influence on customer satisfaction as we from the core product or service to the emotional elements of interaction. As we move from the core product or service to delivery to interpersonal interaction and on to delivering positive emotions, we are addressing progressively higher order customer needs, similar to human needs. In this movement, we are adding progressively more value to the customer. It is far easier to differentiate ones company from the competition by competing at the higher levels of this model than at the level of core and process.

Gauging the level of customer satisfaction and its determinants is critical for every company. Marketers can use such data to retain customers, sell more products and services, improve the quality and the value of their offerings and operate more effectively and efficiently. Customer satisfaction measurement includes quantitative and qualitative measures, as well as a variety of contact methods with customers. These methods and instruments and examples of their applicayions to business situations are: Customer satisfaction data collection instruments Customer satisfaction surveys Generally, customer satisfaction surveys use 5 point sementic differiantial scales ranging from very dissatisfied to very satisfied the customers are along relevant attributes of the product or the service and the relative importance of the attributes (using an important scale). Research shows that customers who indicate they are very satisfied (typically a score of 5 on the satisfaction scale) are much more profitable and loyal than customers who indicate that they are satisfied (a score of 4). Therefore, companies that merely strive to have satisfied customers are making a crucial error. SUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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Customers expectations Vs their perceptions of the product or service delivered This approach states that customers satisfaction or dissatisfaction is a function of the difference between what they had expected to get from the product or the service purchased and their perceptions of what they received. A group of researchers developed a scale that measures the performance of the service received against 2 expectations levels: adequate service and desired service, and also measures the customers future intentions regarding purchasing the service. This approach is more sophisticated than standard customer satisfaction survey and services that fall short of customers expectations. Mystery shoppers This method consists of employing professional observers, posing as customer, to survey and provide an unbiased evaluation of the operations service against the companys service standards in order to identify opportunities for improving productivity and efficiency. For example, one bank used mystery shoppers who, while dealing with a bank employee on another matter, dropped hints about buying a house or seeking to borrow college funds. Employees were a score on how quickly and effectively they provided information about the banks pertinent product and service. The Wall Street Journal employed a Dallas firm to dispatch mystery shoppers to 25 McDonald outlets in the New York, Chicago, Dallas and Los Angeles regions. The reports indicated that only 64% of the employees encountered by the mystery shoppers greeted customers with a smile, only 52% repeated the order for accuracy, and only 36% mentioned food promotions or large size products.



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About 40% of customers were those who were visiting the store for first time. About 33% of customers were those who visits the store every month. About 27% of customers were those who visits the store once in 6 month or more.



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21% customers came to know about the store by In-store display. 53% customers came to know about the store by word of mouth. 11% customers came to know about the store by attractive window display. 5% customers came to know about the store by print media. 10% customers came to know about the store by internet.



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W hich sto For adults clothing mass number of people prefer to shop at Hyderabad Central and LifeStyle. For Lifestyle products mass number of people prefer to shop at Hyderabad Central and LifeStyle and Shoppers Stop.



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Brand Awareness among the customersBrands Arrow Wrangler Lee Cherokee Auburn Hill US Polo Flying Machine Newport SUMMER INTERNSHIP (2008-10)No. of Customer

75 72 56 49 43 36 75 56FASHION MANAGEMENT STUDIES

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Q. No. 05Most of the people said that they like brands like Arrow, Wrangler, Lee, or Flying Machine because of the quality and the comfort of the product.



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W h at dSUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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ConclusionsSUMMER INTERNSHIP (2008-10) FASHION MANAGEMENT STUDIES

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Store should keep all the merchandise of the lead

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