Royal Sporting House (RSH), a multi-brand sports retailer, has entered into an alliance with Shoppers' Stop to consolidate the retailing of sports and active lifestyle products. According to the arrangement, RSH will retail its existing range of brands in all the eight Shoppers' Stop retail outlets and also in seven more Shoppers' Stop outlets that are expected to come up in the next two-and-a-half years. The sports and active lifestyle products at all Shoppers' Stop locations will be under the Royal Sporting House banner.
Depending on the area of the outlets the retail space allotted for purpose ranges from 1,000-2,000 sq feet. Brands that would be displayed at the retail outlet under the RSH banner include Reebok, Adidas, Nike, New Balance, Umbro, Catter-Pillar, Merrell, LA Gear, Speedo, Dunlop, Rider, Mizuno, US Kids, Union Bay etc.
For RSH, joining hands with Shoppers' Stop was an opportunity to showcase its strength by leveraging the brand equity the retailing chain enjoys. On the other hand, Shoppers' Stop's decision to enter into an alliance was based on the lucrative growth prospect the sports and active lifestyle category presented. "The sale of sports and active lifestyle products contributed about 3-3.5 per cent to last year's turnover of Rs 212 crore. With the alliance we expect sales from such products to contribute 4.5-5 per cent to the targeted turnover of Rs 255-265 crore," says B S Nagesh, customer care associate, MD &CEO, Shopper's Stop Ltd.
However RSH's magnitude of expectations from the alliance far exceed that of Shoppers' Stop. "According to our estimates, about 70 per cent of the total sales will come through the alliance," says Bhupendra Nagpal, CEO, RSH India Ltd. RSH, owned by RSH Pte Ltd (a Singapore-based multi-brand sports retailer), opened its first outlet in India at Ansal Plaza (in south Delhi) in November 2000. It is targeting a turnover of Rs 12 crore this year and Rs 30 crore for the year 2002-2003.
Currently, RSH has 13 independent multi-brand outlets in eight cities that include Delhi, Chandigarh, Jaipur and Bangalore. Plans of opening up four more independent multi-brand outlets are underway. These should be up and running by 2002. Investments in each outlet amount to Rs 50 lakh. RHS has set an ambitious target for itself. It hopes to capture 20 per cent of the Rs 300 crore organised sports and active lifestyle products market.
The company executives say its has started getting 'calls' from advertising agencies. "Though we have not called for a formal pitch, four agencies - Mudra Communications, Lintas, TBWA/Anthem and Publicis have got in touch with us. But, for the time being, our prime focus is on the marketing tie-up with Shoppers' Stop," says R D Singh, general manager, RSH India Ltd. The company hopes to use the media to popularise some of its international brands such as New Balance and Catter-Pillar next year.
Shoppers' Stop, however, has no big advertising plans for the immediate future. Right now it is concentrating on its expansion plans. The company had planned to take the number of outlets to 23 in the next two-and-a-half years. But it has scaled it down to 15; which essentially means seven more are going to be added to the existing eight. Explaining the reason behind this decision, Nagesh says, "Sourcing property is very difficult and that is the only reason why we are behind schedule." The company is investing Rs 50-55 crore in setting up the seven new outlets.
Of the seven stores, three will be opened in Mumbai (making it a total of five stores in the city). Two will come up in Delhi and one each in Kolkata and Ahemdabad. The other eight stores are located in the metros of Mumbai, Bangalore, Hyderabad, Jaipur, Chennai and Pune.
© agencyfaqs! 2001