Dec 15, 2008

Business - Q&A MD of Reebok India

John Sarkar

He believes that this is a good time for companies to take fresh guard, review their business models and be innovative. Under his leadership, Reebok has undergone unprecedented growth, with business growing over 6 times in the last 5 years. And if industry estimates are to be believed, the company is still going strong in these tough times.

The MD of Reebok India, Subhinder Singh Prem, has many firsts to his credit. He has motivated his team to achieve a new industry benchmark of opening one new store every second day, as a result of which Reebok has pioneered distribution in this industry with approx 750 stores spread across Tier I, II and III cities.

He has encouraged his team to recognise upcoming trends, take risks and maintain the competitive edge, which has led to the launch of Reebok Classics Stores. He also initiated the opening of exclusive women’s and junior’s stores and is responsible for the tie up with Manish Arora for Reebok Fish Fry.

With Reebok for the last 13 years, Prem is a keen fitness-freak and a marathon runner. He loves to listen to music, catch up on some reading and spend time with his family in his free time. Prior to Reebok he has had stints in Ranbaxy and the Middle East. Here he talks about his company’s plans and strategies to push through the slowdown.

What are the challenges that you are facing right now?

Lending. Banks are not willing to lend. We have had a series of meetings with banks with regards to our franchisees. Other than this we haven’t seen much change in consumer behaviour due to the slowdown. In fact, we are planning to sell around 1 lakh pairs of the recently launched Hex Ride shoes. These shoes are expensive, priced between Rs 5000 and Rs 10,000 and if we can achieve our target it’s a neat business worth around Rs 50 cr.

What are the strategies that you are putting in place to maintain the momentum?

We are concentrating on our in-store efforts to increase the average transaction value (ATV). For instance, if a buyer walks in to purchase a pair of shoes, we are trying to make sure that he leaves our store with much more such as, socks, bags, apparel etc. Also, we have something known as better-than-before (BTB) meetings. We hold daily meetings at all levels to understand how we can improve upon our last performance. Then we have other initiatives such as free fitness workout sessions to increase the number of walk ins. At the same time, we are going back to our transporters to see how we can reduce logistics cost effectively. In short, the idea is to go micro; the idea is to keep your eye consistently on the ball right now because it’s swinging.

What are your concerns?

The weakening of the rupee is a big thorn in our side. Almost 60% of our footwear is imported, our apparels are made in India but the fabric comes from abroad. So, these things have to be factored in to maintain a healthy bottom line.

Which are the categories that you are focussing on now?

The women’s line that we launched earlier is one of our prime focus areas. There are a host of things that we have planned around this category. Right now we have 15 standalone women’s stores and we will end this year with the category contributing around 20% to our overall revenues. Even the kid’s range that we have is catching up very fast.

Out of the four metros which ones have contributed the most to your revenues?

Mumbai has been the biggest market for us so far. It has always been a tug of war between Delhi and Mumbai but this time due to the bomb scares, business in Delhi has been badly hit and we didn’t do as well as we expected to.

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