Lacoste not to shed premium tag or cut prices

Mumbai, Sept. 6:  

French lifestyle brand Lacoste will not shed its premium tag and drop prices for the Indian market. It started India operations 20 years ago when its classis polo shirt was priced at Rs 800. The same garment now retails at Rs 2,950.
“We cannot and will not roll back prices as it will compromise on our international positioning. In fact, with inflation, costs will only go up with respect to our overheads and raw material, leading to further price escalation in the future,” said Rajesh Jain, Director and CEO, Lacoste India.
Lacoste has also stayed away from e-commerce in India, as it would lead to discounting its apparel brand. “In India, e-commerce sites offer discounts. We are at a nascent stage of considering our own Web site. If we do enter e-commerce, we would like to partner with like-minded premium players and not those in the discount format model,” added Jain.
Currently, Lacoste is facing a challenge on how to control its prices given the rupee depreciation. “While 90 per cent of the brand is manufactured in India, we continue to import Egyptian cotton to make yarn. Due to this, dollar escalation has affected our raw material costs. Yarn prices have increased by almost 20 per cent,” he said.
The brand which is present across boutiques and multi-brand outlets, now plans to expand to tier 2 towns such as Pune, Chandigarh and Jaipur. However, it is not seeking international funds to expand its retail operations.
“We can sustain the business and do not need foreign direct investment, as there is enough potential in the Indian market,” said Jain. Operating the brand through an exclusive licensing arrangement with Indian company Sports & Leisure Apparel Ltd, Lacoste also plans to extend its operations to neighbouring countries. “Last year, we entered Maldives through our Indian operations. We are evaluating the bridge-to-luxury segment in countries such as Sri Lanka and Nepal,” he added.
Lacoste does not want to experiment with new categories. “We did have a limited kurta-pyjama set for the Indian market, but are now staying away from new categories such as home linen, as the market for expensive linen is still not developed in India,” said Jain.
purvita@thehindu.co.in

(This article was published in the Business Line print edition dated September 7, 2013) 

 

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