Apparel Retailing

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By

DEPARTMENT OF COMMERCE

UNIVERSITY

LUCKNOW 2013

OF LUCKNOW

Doctor Of Philosophy IN

COMMERCE

Under the Supervision of

Prof. Somesh Kumar Shukla

THESIS

SUBMITTED TO THE UNIVERSITY OF LUCKNOW

FOR THE DEGREE OF

APPAREL RETAILING: CHALLENGES

AND PROSPECTS IN INDIA

With Special Reference to Lucknow Division

M.Com., Ph.D., D.Lit.

SAUKAT ANSARI


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Prof. S.K. Shukla Department of Commerce

University of Lucknow

Lucknow

CERTIFICATE

Certified that Mr.Saukat Ansari has completed the thesis titled

“APPAREL RETAILING: CHALLENGES AND PROSPECTS

IN INDIA-WITH SPECIAL REFERENCE TO LUCKNOW

DIVISION” for the award of Ph.D. degree in Commerce at

University of Lucknow, Lucknow under my supervision. To the best

of my knowledge and belief the thesis under reference is based on

original research work done by Mr.Saukat Ansari. He fulfills the

conditions laid down in relevant ordinances.

(Prof. S. K. Shukla)

Supervisor


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PREFACE

It was great experience writing this thesis. I got an opportunity

through this work to conduct a comprehensive study of the subject

that is still in evolutionary phase in the country in all the respects.

Going by the contribution of retail in the GDP of the country, it is the

single biggest source of employment and income for the people of

India.

The business of apparel retail in India has seen significant changes in

the last few years. We have seen the emergence of new formats and

application of global concepts and constructs albeit with

modifications to suit the Indian environment. It not only provides the

Indian consumers a wide choice, but also represents a very large

employment opportunity for people with diverse skill sets.

Despite the presence of the basic requirements for the growth of the

retail industry in India, it faces substantial hurdles that will retard and

inhibit its growth in future if not addressed sincerely. One of the key

impediments is the partial permission of FDI in MBOs. This has

largely resulted in limited capital investments in supply chain

infrastructure, which is a key for the development and growth ofapparel retailing and has also constrained access to world class retail

practices. Lack of adequate infrastructure and relatively high cost of

real estate are the other impediments to the growth of retailing. While

the industry and the government is trying to remove many of these

hurdles, some of roadblocks like lack of training required to fashion

retailers and setting up a body to keep a close watch on fast changing


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fashion trends still a concern and may continue to affect the smooth

growth of fashion industry-if it is not taken seriously.

The mindset of the retailers especially those involved in organized

part of retail needs to understand the role of customers that will be

helpful in the development of the business. Customers are confronted

umpteen numbers of alternatives in front of them. Sensing the

importance of matter at hand, it was taken by me as a subject of study

in the present thesis.

The study is focusing on apparel retailers’ perception about

challenges and prospects in the industry. Subject like apparel retailing

is broad in scope and nature. For the sake simplicity and readers

‘convenience, thesis has been developed chapter wise. There are eight

chapters. First chapter deals with introduction of apparel retailing.

Second chapter is concerned with retail formats. Content of third

chapter is related with emerging trends in apparel retailing. Fourth

chapter deals with challenges and prospects in apparel retailing. Fifth

chapter is concerned with analytical study. Chapter seven is related

with bibliography. And finally chapter eight deals with appendices.

As a researcher, I hope that the present work shall prove to be highly

effective one for an in-depth study of the subject which is yet to get

an industry status in India.

In the present research, I find utter lack of words to express my

indebtedness to my supervisor Prof. Somesh Kumar Shukla,

Department of Commerce, University of Lucknow, Lucknow whose

continuous guidance and help encouraged me a lot in completing the

study in time. Further, I am thankful to the Almighty for keeping me


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healthier and happier which play a decisive role in any assignment a

person undertakes and completes. I am thankful to all the faculty

members of Department of Commerce, University of Lucknow,

Lucknow for giving me inputs and suggestions to commence the

thesis in first instance; access to departmental library, Central Library

(Tagore Library), Gyanodaya, library of IIM, Lucknow, Giri Institute

of Development Studies, Lucknow, great place to learn. The help of

non-teaching members at the Department of Commerce at the

University too deserves my thankfulness.

At the end, I cannot forget the blessings of my parents and assistance

from my friends for constantly motivating me to culminate the hard

works into a thesis.

Happy and thoughtful reading ahead.

Date: (SAUKAT ANSARI)


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CONTENTS

Page No.

Certificate i

Preface ii

List of Tables xiv

List of Figures xvi

Glossary of Terms and Abbreviations xviii

1. Introduction 1-52

1.1 Apparel

1.1.1 Features of Apparel

1.1.2 Functions of Apparel

1.2 Retailing

1.2.1 Retail and Retailing

1.2.2 Place of Retailing in a Distribution Channel

1.2.3 Organized and Unorganized Retailing

1.2.4 Significance of Retail Industry

1.2.5 Characteristics of Retailing

1.2.6 Activities Performed by Retailers

1.2.7 Challenges in Retail Business

1.2.8 Evolution of Retail in India

1.3 Apparel Retailers

1.3.1 Departmental Stores in the Apparel Category

1.3.2 Apparel Retailing in India

1.3.3 Indian Apparel Retail Scenario


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1.3.4 Characteristics of Apparel Retail Sector

1.3.5 Classification of Apparel1.3.6 Key Menswear Brands

1.4 Lucknow Division

1.4.1 Lucknow District

1.4.2 Sitapur District

1.4.3 Lakhimpur Kheri District

1.4.4 Raebareli District

1.4.5 Unnao District

1.4.6 Hardoi District

1.5 Literature Review

1.6 Purpose of the Study

1.6.1 Objectives

1.6.2 Hypothesis

1.6.3 Limitations of the Study

1.7 Research Methodology

1.7.1 Research Level

1.7.2 Approach to Research

1.7.3Data Collection

1.7.4 Primary Data Techniques

1.7.5 Secondary Data and Material Collection

1.7.6 Sampling Unit

2. Retail Formats and Retailers 53-79

2.1 The Evolution of Retail Formats

2.2 Unorganized Retail Formats


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2.2.1 Mom and Pop Stores

2.2.2 Street Vendors2.2.3 Kiosks

2.3 Modern Retail Formats

2.4 Classification of Retailers

2.4.1 Legal Forms

2.4.2 Operational Structure

2.4.3 Range of Merchandise

2.4.4 Degree of Services

2.4.5 Pricing Policy

2.4.6 Location

2.4.7 Size of Outlet

2.4.8 Based on Customer Contact

2.5 Types of Retailers Based on Merchandise and Pricing

2.5.1 Departmental Stores

2.5.2 Specialty Stores

2.5.3 Discount Stores

2.5.4 Super Markets, Superstores and Hypermarkets

2.6 Types of Retailers Based on Operational Structure

2.6.1 Independent Traders

2.6.2 Multiple or Retail Chain Stores

2.6.3 Co-operative Societies

2.6.4 Concessionaire

2.6.5 Franchising

2.7 Non-Store Retailing


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2.7.1 Mail Order

2.7.2 Mail Order Catalogues2.7.3 Direct Response Advertising

2.7.4 Direct Mail

2.7.5 Direct Selling

2.7.6 Door-to-Door Trading

2.7.7 Mobile Shops

2.7.8 Markets (Haats)

2.7.9 Automatic Vending

2.7.10 Electronic Retailing

2.7.11 Retailing through Television

2.7.12 Retailing through Internet

3. Emerging Trends in Apparel Retailing 80-133

3.1 Influence of Fashion

3.1.1 India’s Fast-Growing Apparel Market

3.1.2 Increase in Disposable Income

3.1.3 New Occasions

3.1.4 Growth in Women’s Segment

3.1.5 Fashion Increasing a Form of Self- expression

3.1.6 Further Urbanization and the Comparative Youth

of India’s Population

3.1.7 Continued Rise of Organized Retail

3.1.8 Shape the Category

3.1.9 Focus on Inventory and Markdown Management

3.1.10 Take a Segmented View of the Market


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3.2 The Changing Face of Fashion Industry

3.2.1 Emergence of Mall Culture3.2.2 Boutiques

3.2.3 Advent of Brands

3.2.4 Fashion on the Ramp

3.2.5 Beauty Pageants

3.2.6 Budding Designers

3.3 The Rising Mall Culture

3.3.1 Impulse Buying at Malls

3.3.2 Factors Affecting the Success of Malls

3.4 Application of Information Technology (IT) in Apparel

Retailing

3.4.1 Areas where it will have Most Impact

3.4.2 Inventory Control

3.4.3 Point of Sales (POS)

3.4.4 Sales Analysis

3.4.5 Planning and Forecasting

3.4.6 Collaborative Planning, Forecasting and

Replenishment (CPFR)

3.4.7 Other Areas of Development

3.5 Essential Requirement of an Information System

3.5.1 Be Simple for Clerks to Operate

3.5.2 Monitor Sales and Inventory Levels Daily

3.5.3 Monthly

3.5.4 Ease of Creation of New or Computer


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Recommended Purchase Orders

3.5.5 Electronic Data Interchange (EDI)3.5.6 Comprehensive Information Receiving

3.6 Enterprise Resource Planning (ERP)

3.7 New Trends in IT Applications in Retailing

3.7.1 Web Enabled System

3.7.2 Data Mining Tools

3.7.3 New LAN/WAN Tools and Strategies

3.7.4 Interactive Kiosks

3.7.5 Self-Scanning for Faster Processing

3.8 The Need for Product Identification

3.9 Radio Frequency Identification (RFID)

3.10 E-Commerce or E-Tailing

3.11 Prevailing Trends in Indian Readymade Garment Industry

3.11.1 Overview-Indian Apparel Market

3.11.2 Indian Fashion Retail Poised for Big Times

3.12 Entry Options for Foreign Players Prior to FDI Policy

3.12.1 Franchise Agreements

3.12.2 Cash and Carry Wholesale Trading

3.12.3 Strategic Licensing Agreements

3.12.4 Manufacturing and Wholly Owned Subsidiaries

3.13 FDI Policy in India

3.13.1 FDI Policy with Regard to Retailing in India

3.13.2 Prospected Changes in FDI Policy for Retail

Sector


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3.14 Single and Multi-Brand Retailing

3.14.1 FDI in Single-Brand Retail3.14.2 FDI in Multi-Brand Retail

4. Challenges and Prospects in Apparel Retailing 134-183

4.1 Challenges to Retail Development in India

4.1.1 Retail in India-Getting Organized to Drive Growth

4.1.2 Market Overview

4.1.3 Market Segments

4.2 Investment Opportunities in the Retail Sector

4.2.1 Reasons Why Retail is Booming?

4.2.2 Reasons Why Indian Organized Retail is on the

Brink of Revolution?

4.2.3 Disturbing Trends

4.3 Focus on India: How Competitive is its Textile and

Clothing Industry?

4.3.1 SWOT Analysis for India

4.3.2 Investment in Textile Machinery

4.3.3 Competitive Position of Pakistan

4.3.4 Competitive Position of Bangladesh and Sri Lanka

4.4 Production of Fibres

4.5 Indian Retail Reforms

4.5.1 Indian Retail Reforms on Hold

4.5.2 Single-Brand Retail Reforms Approved

4.5.3 Social Impact and Controversy with Retail

Reforms


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4.5.4 Controversy over Indian Retail Reforms

4.5.5 Opposition to Retail Reforms4.5.6 Support for Retail Reforms

4.5.7 Farmer Groups

4.5.8 Economists and Entrepreneurs

4.5.9 Chief Ministers of Indian States

4.5.10 Current Supermarkets

5. Analytical Study 184-233

5.1 Sample Size

5.2 Observations, Findings and Interpretations

5.2.1 Types of Retailers

5.2.2 Amount invested initially?

5.2.3 Dou you deal in?

5.2.4 Do you deal in branded apparel?

5.2.5 Do you face competition from?

5.2.6 How do your competitors affect you?

5.2.7 What do you think about your employees?

5.2.8 Do you have the problems because of location?

5.2.9 If yes, what kinds of problems?

5.2.10What do you think about foreign players/

Companies?

5.2.11 What prospects do you perceive in apparel

retailing?

5.2.12 Is high consuming class helping retailing growth?

5.2.13 If yes, who are your main customers?


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5.2.14 What age groups do often shop from your outlets?

5.2.15 What role does fashion play in apparel retailing?5.2.16 What do you perceive about Mall Culture?

6. Conclusions and Suggestions 234-245

7. Bibliography 246-250

8. Appendices 251-253

8.1 Questionnaire Used in the Survey

***


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LIST OF TABLES

Table No. Title Page No.

1.1 Key Menswear Brands 26

3.1 Apparel is the most profitable segment of the

Indian retail market today 86

4.1 Major textile production clusters in India 141

5.1 No. of Respondents in Districts 184

5.2 Types of Retailers 186

5.3 Amount invested initially? 189

5.4 Dou you deal in? 192

5.5 Do you deal in branded apparel? 195

5.6 Do you face competition from? 198

5.7 How do your competitors affect you? 201

5.8 What do you think about your employees? 204

5.9 Do you have the problems because of location? 207

5.10 If yes, what kinds of problems? 210

5.11 What do you think about foreign players/

companies? 213

5.12 What prospects do you perceive in apparel

retailing? 217

5.13 Is high consuming class helping retailing growth? 220

5.14 If yes, who are your main customers? 223


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5.15 What age groups do often shop from your

outlets? 226

5.16 What role does fashion play in apparel retailing? 229

5.17 What do you perceive about Mall Culture? 232

***


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LIST OF FIGURES

Figure No. Title Page No.

1.1 Typical Marketing Channels 4

1.2 Organized and Unorganized Retailing 5

1.3 Activities of Retailers 8

1.4 Evolution of Retail in India 14

1.5 Classification of Apparel 25

2.1 Forces Affecting Modern Retail Formats 57

2.2 Classification of Retailers based on Legal Form 58

2.3 Classification of Retailers based on Operational

Structure 59

2.4 Classification of Retailers based on Range of

Merchandise 59

2.5 Classification of Retailers based on Degree of

Services 60

2.6 Classification of Retailers based on Pricing Policy 61

2.7 Classification of Retailers based on Size of Outlet 62

4.1 Key Segments of the Textile Industry 139

5.1 Types of Retailers 187

5.2 Amount invested initially? 190


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5.3 Dou you deal in? 193

5.4 Do you deal in branded apparel? 196

5.5 Do you face competition from? 199

5.6 How do your competitors affect you? 202

5.7 What do you think about your employees? 205

5.8 Do you have the problems because of location? 208

5.9 If yes, what kinds of problems? 211

5.10 What do you think about foreign players/

companies? 214

5.11 What prospects do you perceive in apparel

retailing? 218

5.12 Is high consuming class helping retailing growth? 221

5.13 If yes, who are your main customers? 224

5.14 What age groups do often shop from your outlets? 227

5.15 What role does fashion play in apparel retailing? 230

5.16 What do you perceive about Mall Culture? 233

***


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GLOSSARY OF TERMS AND ABBREVIATIONS

ATM Asynchronous Transfer Mode

ATM Automatic Teller Machine

BPO Business Process Outsourcing

CAGR Compound Annual Growth Rate

CIFA Consortium of Indian Farmers Association

CII Confederation of Indian Industry

CPRF Collaborative Planning, Forecasting and Replenishment

DIPP Department of Industrial Policy and Promotion

ECR Efficient Customer Responce

EDI Electronic Data Interchange

EDLP Every Day Low Price

ERR Enterprise Resource Planning

EU European Union

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act

FIPB Foreign Investment Promotion Board

FPSs Fair Price Shops

GDP Gross Domestic Product

GRDI Global Retail Development Index

IBEF Indian Brand Equity Fund

IT Information Technology

ITMF International Textile Manufacturers Federation

LAN Local Area Network

LSM Local Store Marketing


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MBOs Multi Brand Outlets

PDS Public Distribution SystemPO Purchase Order

POS Point of Sale

PSS Portable Shopping System

QR Quick Response

RBI Reserve Bank of India

RMDs Ready Made Garments

RFID Radio Frequency Identification

SIA Secretariat for Industrial Assistance

SKNL S.Kumars Nationwide Limited

TMC Technology Mission on Cotton

TUFS Technology Upgradation Fund Scheme

UPC Universal Product Code

VAT Value Added Tax

WAN Wide Area Network

***


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Chapter-1

INTRODUCTION


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1.1 Apparel

Apparel means clothing, especially outerwear; garments and attire.

Apparel is a term that refers to a covering for the human body that is

worn. The working of clothing is exclusively a human characteristic

and is a feature of nearly all human societies. The amount and type of

clothing worn depends on physical, social and geographical

considerations.1

1.1.1 Features of Apparel

Physically, clothing serves many purposes; it can serve as protection

from the elements, can enhance safety during hazardous activities

such as hiking and cooking. It protects human from rough surfaces by

providing a barrier between the skin and the environment. Clothes can

protect humans from insect bites. Clothes can regulate temperature in

the cold or heat. Further, it can provide a hygienic barrier, keeping

toxins away from the body and limiting the transmission of germs,

clothing also provides protection from harmful ultra violet radiation.

1.1.2 Functions of Apparel

The primary function of clothing is to improve the comfort of the

wearer. In hot climates, clothing provides protection from sunburn or

wind damage, while in cold climates its thermal insulation properties

are generally more important. Shelter usually reduces the functional

need for clothing.

Clothing performs a range of social and cultural functions, such as

individual, occupational and sexual differentiation, and social status.


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In many societies, norms about clothing reflect standards of modesty,

religion, gender, and social status. Clothing may also function as a

form of adornment and an expression of personal taste or style.

Humans have shown extreme inventiveness in devising clothing

solutions to environmental hazards. Some examples include: space

suits, armor, diving suits, swim suits, beekeeper gear, and other

protective clothing.

The wearing of clothes also has social implications. They are worn to

cover those parts of the body which social norms require to be

covered, and act as a form of adornment, as well as other social

purposes.

In most cultures, gender differentiation of clothing is considered

appropriate for men and women. The differences are in styles, colours

and fabrics.

1.2 Retailing

Retailing is the final connection in the marketing channel that brings

goods from manufacturers to consumers. In other words, retailing is

the combination of activities involved in selling or renting consumer

goods and services directly to ultimate consumers for their personal

and household use. In addition to selling retailing includes different

and diverse activities like buying, advertising, data processing and

maintaining inventory.

Retailing includes all the activities involved in selling goods or

services directly to finals consumers for their personal, non-business


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use. Any organization that does this selling-whether a manufacturer,

wholesaler, on retailer-is doing retailing. It does not matter how the

goods or services are sold (by person, mail, telephone, or vending

machine) or where they are sold (in a store, on the street, or in the

consumer’ home). On the other hand, a retailer or retail store is any

business enterprise whose sales volume comes primarily from

retailing.

1.2.1. Retail and Retailing

The word ‘retail’ is derived from the French word ‘retaillier’, which

means ‘to cut a piece off’ or ‘to break bulk’. Retail is any business

that directs it marketing efforts towards satisfying the final consumer

based upon the organization of selling goods and services as means of

distribution.

The term ‘retailing’ is derived from the old French word ‘retailer’

meaning ‘a piece of’ or ‘to cut up.’ This can be applied to the

functions carried out by the retailer-acquiring whole stock of goods

which they divide into smaller amounts which are sold to individual

consumers. Retailing can be referred to all activities involved in

marketing and distribution of goods and service.

1.2.2 Place of Retailing in a Distribution Channel

When you buy a product, you rarely buy it directly from the

manufacturer. Most products of the goods and service do not sell

their products directly to end or final users. Between you (the final

user) and the manufacturers are a number of intermediaries. These


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intermediaries constitute a distribution channel or marketing channel.

Some of the most common marketing channels are:

(1) (2) (3)

Fig.1.1 Typical Marketing Channels

1.2.3 Organized and Unorganized Retailing

Indian retail industry is divided into two sectors – organized and

unorganized.

Organized retail sector refers to the sectors undertaken by licensed

retailers, that is, those who are registered for tax on moveable

commodities at times of sales under VAT system. At present the

name of the tax is commerce tax. These include the corporate retail

formats of the exclusive brand outlets, hypermarkets, departmental

stores and shopping malls.

F e ef b a c k


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Unorganized retailing on the other hand, refers to the traditional

formats of low cost retailing, for example, hand cart and pavement

vendors, the local kirana shops, owner-manned general stores,

paan/beedi shops, convenience stores, hardware shop at the corner of

your street selling everything from bathroom fittings to paints and

small construction tools; or slightly more organized medical store and

a host of other small retail businesses in apparel, electronics, etc.

Retailing

Unorganised Retailing

KiranaShops

ConvenienceStores

Corporate BackedHypermarket

Paan/BeediShops

Privately Owned LargeRetail Businesses

Hand Cart &Pavement Vendors

Owner MannedGeneral Stores

RetailChains

Organised Retailing

Fig.1.2Organized and Unorganized Retailing

1.2.4 Significance of Retail Industry

Consumer money drives the economy, and retail is where consumers

spend that money. Boutiques, restaurants, discount superstores, mail-

order companies and e-tailers-these establishments where consumers

spend their hard-earned money. When goods are put in the hands or

shopping bags of consumers, retailers realize revenue-and so do the

wholesalers, distributors, and manufacturers that make up the rest of

the consumer goods distribution chain. In addition, retail transactions


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serve as a means for collecting sales taxes, which support public

services of all kinds.

Retails goods are traditionally divided into durable goods, such as

furniture, cars, and large appliances, which are expected to last at

least five years and non-durable goods, which include food, clothing,

and other categories far too numerous to mention but which

eventually form the bulk of the stuff you see on make shift tables at

garage sales.

Retail industry provides immense opportunities to entrepreneurs and

workforce as sales people and clerks, the industry has also

opportunities for people interested in determining what goods will be

sold, getting these goods to the right place at the right time, and

managing the operations, finance, and administration of retail

companies.

Retailing is the dynamic industry-constantly changing due to shift in

the needs of the consumers and the growth of technology. Retail

formats and companies that were unknown three decades ago are now

major forces in the economy. Therefore, the challenges for retail

manager the world over are increasing-they must take decision raging

from setting the price of a bag of rice to setting up multimillion dollar

stores in malls. Selecting target markets, determining what

merchandise and services to offer, negotiating with suppliers, training

sales people - these are just a few of the many functions that retail

manager has to perform on a perpetual basis.


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1.2.5 Characteristics of Retailing

Retailing can be distinguished in various ways from other businesses

such as manufacturing. Retailing differs from manufacturing in the

following ways:

• There is direct end-user interaction in retailing.

• It is the only point in the value chain to provide a platform for

promotions.• Sales of the retail level are generally in smaller unit sizes.

• Location is a critical factor in retail business.

• In most retail businesses, services are as important as core

products.

• There are a large number of retail units compared to other

members of the value chain. This occurs primarily to meet therequirements of geographical coverage and population density.

1.2.6 Activities Performed by Retailers

Retailers undertake various business activities and perform functions

that add value to the offerings they make to their target segments.

Retailers provide convenient location, stock, and appropriate mix ofmerchandise in suitable packages in accordance with the needs and

wants of customers.

The four major activities carried out by retailers are: arranging

assortment, breaking bulk, holding stock and providing services.


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incomes has led to an increased demand for better quality products

while lack of time had led to a demand for convenience and services.

The demand for frozen, instant, ready-to-cook, ready-to-eat food has

been on rise, especially in the metropolitan and large cities in India.

There is also a strong trend in favour of one stop shops like super-

markets and department stores.

The Mc Kinsey Report 2010 predicts that FDI will help the retail

business to grow to US $ 460-470 billion (Rs.21811.633 billion-

22285.802 billion) by 2010. There has been a strong resistance to

Foreign Direct Investment (DFI) in retailing from small traders who

fear that foreign companies would take away their business, lead to

the closure of many small trading businesses, and result in large-scale

un-employment. Therefore, government has discouraged FDI in the

retail sector. At present, foreign retailers can enter the retailing sector

only through restricted modes.

1.2.4 Challenges in Retail Business

To become a truly flourishing industry, retailing needs to cross the

following hurdles:

• Automatic approval is not allowed for foreign investment in

retail.

• Regulations restricting real estate purchases, and cumbersome

local laws.

• Taxation which favours small retail businesses.

• Lack of trained work force.


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• Absence of developed supply chain and integrated IT

management.• Low skill level for retailing management.

• Intrinsic complexity of retailing - rapid price changes, constant

threat of product obsolescence and low margins.

1.2.5 Evolution of Retail in India

While barter would be considered to be the oldest from of retail trade,since Independence, retail in India has evolved to support the unique

needs of our country given its size and complexity. Haats, Mandis

and Melas have always been a part of the Indian landscape. They still

continue to be present in most parts of the country and from an

essential part of life and trade in various areas.

The PDS or the Public Distribution System would easily emerge as

the single largest has its origin in the ‘retaining’ system introduced by

the British during the World War II. The system was started in 1939

in Bombay and subsequently extended to other cities and towns. By

the year 1946, as many as 771 cities/towns were covered. The system

was abolished post war; however, on attaining Independence, India

was forced to reintroduce it in the face of renewed inflationary

pressure in the economy.

The Green Revolution and food self-sufficiency brought about a new

dimension in the food grains management. The focus was on fair

procurement price for farmers to insulate them from market

anomalies, buffer stocking, and control of market prices and public

distribution of essential commodities. Food Corporation of India was


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established in 1965, to function as an autonomous organization,

working on commercial lines, to undertake purchase, storage,

movement, transport, distribution and sale of food grains and other

food stuff.

In 1984, Government of India created the Ministry of Food and Civil

Supplies with two departments namely Department of Food and

Department of Civil Supplies; the letter bring in charge of PDS.

The PDS as is understood today is a means for distribution of

essential commodities to a large number of people through a network

of Fair Price Shops (FPS’s) on a recurring basis. The commodities

are as follows.

• Wheat

• Rice

• Sugar

• Kerosene

PDS evolved as a major instrument of the government’s economic

policy for ensuring availability of food grains to the public at

affordable prices as well as for enhancing the food security for thepoor. It is an important constituent of the strategy for poverty

eradication and is intended to serve as a safety net for the poor whose

number is more than 330 million and are nutritionally at risk. PDS

with a network of about 4.78lakh Fair Price Shops (FPS) is perhaps

the largest distribution network of its type in the world.3 PDS is a

crucial part of life in many parts of India. PDS is operated under the

joint responsibility of the Central and the State Government. The


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Central Government has the responsibility for procurement, storage,

transportation and bulk allocation of food grains, etc. The

responsibility for distributing the same to the consumers through the

network of FPSs rests with the State Governments. The operational

responsibilities including allocation within the State, identification of

families below poverty line, issue of ration cards, supervision and

monitoring the functioning of FPS’s rests with the State

Governments.4

The Khadi &Village Industries (KVIC) was also set up post

Independence. Today there are more than 7,050 KVIC stores across

the country.5

The cooperative movement in India owes its origin to agriculture and

allied sectors. Towards the end of the19th century, the problems of

rural indebtedness and the consequent conditions of farmers created

an environment for the chit funds and cooperative societies. The

farmers generally found the cooperative movement an attractive

mechanism for pooling the meagre resources for solving common

problems relating to credit, supplies of inputs and marketing of

agricultural produce. The experience gained in the working of

cooperatives led to the enactment of Cooperative Credit Societies

Act, 1904. Subsequently more comprehensive legislation called the

Cooperative Societies Act was enacted. This Act, inter alia, provided

for the creation of the post of registrar of cooperative societies and

registration of cooperative societies for various purposes and audit.


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The co-operative movement in India is amongst the largest in the

world, with strong links across the country’s vast geographical

expanses and varied cultural traditions. The co-operative sector plays

a crucial role in agro-processing, fertilizer and cash crop production

in the country. In fact, operations of dairy co-operatives have

propelled India to attain the top position in milk production in the

world. Additionally, edible oil marketed through co-operatives and

handloom co-operatives are being recognized around the world now

for their efficiency and social empowerment.6

The National Cooperative Consumers’ Federation of India Limited

NCCF) is the apex federation of the consumer cooperatives in the

country. NCCF was set on 16 October, 1965 and is administered

under the Multi State Cooperative Societies Act, 2002. The present

membership of the NCCF is 136 comprising of Primary Cooperative

Stores. Wholesale Societies, State level Consumer Cooperative

Federations, National Cooperative Development Corporation and the

Government of India. The commercial operations of the NCCF are

handled through its headquarters at New Delhi and 34 branches/sub-

branches located in the State Capitals and other important procuring

centers in different parts of the country.

In the past decade the Indian market place has transformed

dramatically. However, from the 1950’s to the 80’s investments in

various industries was limited due to low purchasing power in the

hands of the consumer and the government’s policies favoring of the

small scale sector. Initial steps towards liberalization were taken in

the period of 1985-90. It was at this time that many restrictions on


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private companies were lifted, and in the 1990’sthe Indian economy

slowly progressed from being state led to becoming “market

friendly/market oriented”.

While independent retail stores like Vivek’s and Nalli’s have existed

in India for a long time, the first attempts at organized retailing were

noticed in the textiles sector. One of the pioneers in this field was

Raymond’s, which set up stores to retail fabric. It also developed a

dealer network to retail its fabric. These dealers sold a mix of fabrics

of various textile companies. Other textile manufacturers who also

set up their own retail chains were Reliance-which set up Vimal

showrooms and Garden Silk Mills with Garden Vareli. It was but

natural that with the growth of textile retail, readymade branded

apparel could not be far behind and the next wave of organized retail

in India saw the likes of Madura Garments, Arvind Mills, etc set up

showrooms for branded menswear. With the success of the branded

menswear store the New Age Departmental Store arrived in India in

the early nineties.

Fig.1.4 Evolution of Retail in India


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This was in a sense the beginning of a new era for retail in India. The

fact that post liberalization the economy had opened up and a new

large middle class with spending power had emerged, helped shape

this sector. The vast middle class market demanded value for money

products. The emergence of the modern Indian housewife, who

managed her home and work led to a demand for more products, a

better shopping ambience, convenience and one stop shopping. This

has fuelled the growth of departmental stores, super markets, and

other specialty stores. The concept of retail as entertainment came to

India with the advent of malls. The development of malls is now

visible not only in the major metros but also in the other parts/other

districts of the country.

1.3 Apparel Retailers

Numerous clothing shops are to be found in Indian cities and towns,

especially in shopping centres and markets. Industry experts estimate

the total apparel market in India to be to the tune of Rs. 48,000 -

50,000 crore. Of this, branded apparel is only to the extent of Rs.

9000-10,000 crore.7

Overall, analysts expect the market to grow at 10% to 15% per

annum. The market is over crowed with small and major players.

There are mixes of traditional and modern stores. Traditional outlets

are family-owned business units, generally small in size and cramped,

with little emphasis on alluring displays, and advertising depends on

word-of-mouth or only on their strong customer relationship. They

basically stock a limited range of unbranded or local and popular


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items. These sets of retailers depend on local wholesalers or traders

from manufacturing centers such as Ludhiana, Surat, Ahmedabad,

Kanchipuram and Lucknow for specific kind of clothing. Retailers

usually position their stores on the basis of pricing, quality, and

variety of merchandise and extend various services to their customers

such as credit, home delivery, selection of products at home, tailoring

facility, alteration, returns, and adjustments.

Retailers prefer to attend to their regular and loyal customers

themselves rather than letting the salespeople to attend them. A large

number of such retailers are located in the central business districts or

main markets of the cities, and only a limited number of independent

retailers own massive retail units with designer decor and impassive

layout, known as 'showroom'.

These outlets deal in unstitched or ready-to-wear or both kinds of

offerings. With time, few of the leading independent retail stores from

the unorganized sector have established themselves as successful

retail chains such as Nalli, Kumarans from Chennai, and Bombay

Selection, Meena Bazar from Delhi, Sant Footwear from Ludhiana,

and Delco and Metro from Delhi.

Small townships and social areas of India have a large numbers of

retail stores selling clothes, basically unstitched stuff for the entire

family. These outlets are very small in size, have provisions for

customer to sit inside the shop with retailers and select the

merchandise. The traditional retail set up has been distinctively

classified on account of occasion-specific dressing (formal, casual,

and party/wedding), sex (menswear and women's wear) etc. Because


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of their rock-bottom prices, which are much lower than prices of

branded products, they attract a large number of customers.

In contrast, modern clothing stores are auspicious with attractive

window displays. Most of the manufacturing companies in order to

achieve maximum level of retail penetration to drive bargain, are

using all possible retails formats in the organized sector such as

franchise, retail chain company- owned outlet, etc.

Apparel has identified various types of retail formats within the

organized retail sector such as retail chain, franchise, company owned

stores and department store etc. In the branched clothing segment,

leading company are going for exclusive show-room with trendy and

at ambience to enhance the shopping experience of their shoppers; for

example, Raymonds has 263 outlets, Madura Coats has 100 stores

while Grasim has 106 stores.8

In apparel retailing, a retailer has two choices: either create his own

brand or sell other brands. Own brand definitely offers higher margins

over non-store brands. Margins in apparel retailing covered anywhere

between 40% and 50%. Independent retailers usually prefer to sell

multiple brands rather than specific brand.

1.3.1 Departmental Stores in the Apparel Category

For many foreign and private brands, department stores offer the ideal

retail format for apparel product category. Given the relatively high

prices of leading brands, traditional retailers are reluctant to stock

premium goods. Until now department stores have been few and far


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between in India. But department store chains are now growing,

reflecting the fast pace of modernization in the Indian retailing

industry as a whole.

Prior to economic reforms that began in 1991, department stores did

not seem a viable business in India because of the relative lack of

branded consumer goods available in the market. While a few cutlets

that called themselves department stores did exist, these were

nowhere close to international standards.

Customer patronizing department stores in India are predominantly

from upper-middle and high-income classes since such stores mainly

stock premium brands. To cater to their customers' growing appetite

to foreign brands most department stores stock a range of these.

Indeed, because of their late development in India, department stores

are still considered by most Indians as exclusive shopping outlets that

stock premium, high quality and fashionable products.

1.3.2 Apparel Retailing in India

A new focus on the apparel retail sector has attracted attention in

recent days. Top exporters have introduced their own brands and are

aggressively positioning themselves within segments of the domestic

markets. The rising importance of brand segments in the domestic

market combined with the pressure of competition is blurring the

boundaries between exports and domestic production in countries

with large home markets, such as India. With the changing lifestyle,

organized retail is playing a key role in structuring the Indian


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domestic market, reinforced in particular by rising incomes and

growing purchasing power among consumers in rapidly growing

sectors of the economy such as information technology and Business

Process Outsourcing (BPO).

Retail sector in India is witnessing a huge exercise as traditional

markets make way for new formats such as departmental stores,

hypermarkets, supermarkets and specialty stores. The branded apparel

market represents the largest source of growth. The men’s branded

apparel market is growing at a rate of 21.8% and branded women

apparel segments represents 35% of the total branded apparel market

and is growing at an incredible 23% annually.9

Leading domestic retailers are becoming more firmly entrenched,

increasing their scale of operations and stabilizing their scale of

operations and stabilizing their logistics and technology initiatives. A

few significant foreign players have been selling their branded

apparel in India for number of years. But, now, just like their India

counterparts, global apparel brands are setting up their own apparel

outlets, instead of just selling through departmental stores. Though

local retailers generally enjoy higher margins, they won’t be able to

keep global retailers at bay for long because of international

experience, buying power, IT systems and cash flow to tolerate lower

profits. Presence of these brands will make the Indian consumer

become more aware of the international fashion and lifestyle trends

leading to a move –up of the industry in the value chain.


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1.3.3 Indian Apparel Retail Scenario

In its market research report, Indian Retail Sector – An Outlook

[2005-2010] RNCOS (market research consulting company)

estimated the Indian apparel retail industry generated revenue of $2.0

billion(Rs.89.863 billion) in 2004 with a growth rate of 8.2% during

2000-04. As a result, this industry in India is second largest in the

world after china. The Indian apparel retail industry varies within

even short distances as the designs of the outfits are based on the

regions fashion trends.

According to Global Retail Development Index (GRDI) 2013 India is

positioned as the leading destination for retail investment. This

followed from the saturation in western retail markets and we find big

retailers like Wal-Mart and Tesco entering into Indian market. AT

Kearney has estimated India’s total retail market at US$ 202.6 billion

(Rs.9606.603 billion) which is expected to grow at a compounded 30

percent over the next five years. With the organized retail segment

growing at the rate of 25-30 percent per annum, revenues from the

sector are expected to triple from the current US$ 24 billion

(Rs.1137.9984 billion) by 2010.

Niche foreign are making a beeline for the Indian market. In fact,

despite the FDI policy pertaining to retail being unclear, over 10

foreign niche segment retailers have recently set up or announced

their intention to set up shop in India using the franchisee route, with

several others waiting in the wings.


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International brands such as Benetton, Lacoste, Levi Strauss,

Crocodile, Lee, Wrangler, Nike, Reebok, Adidas, Guess, Esprit,

Mango, Hugo Boss, Mark & Spencer’s and Tommy Hilfiger have

already built a retail presence in the country, while market watchers

point out that several more such as Versace, FCUK, Zara, Mother

Care, IKEA, Fendi, NEXT, Debenhams, Trussardi, and DKNY have

charted out a strategy to enter the Indian market. Most of the brands

entering the market are targeted at the premium end. According to

estimates, the premium apparel segment in India is valued at about

Rs.1900 crore and growing at 20 percent.10

In addition to the patterns above, four additional factors which are

transforming supplier capacities in ways that are blurring the

boundaries between firms producing for the domestic market and

those producing for exports are as follow:

1. Enchantment of local capabilities in the area of logistics i.e.

ware housing and customized tracking systems.

2. Interesting emergence of design as a source of competitive

advantage in Indian apparel.

3. Growing importance of local investment by Indian firms as a

way to counter the exclusion of Indian from all major regional

trade agreements and advantage of tariff free entry into major

markets that many of India’s competitors enjoy i.e. Mexico in

the US markets, turkey and Bangladesh in EU markets.

4. Increasing focus on domestic brands.

5. Renowned exporters in the country such as Reliance,

Raymond, Orient Craft etc. are developing their supplies


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networks and distribution systems, seeking distinctive niches

and generally staking out their terrain in the domestic market to

consolidate their first mover advantage. Success story has

emerged in the domestic apparel garment segments for the

local brands and not limited to Pantaloon, Lifestyle and

Westside only. No wonder a heavy weight like the Reliance

group is planning to do a Wal-Mart in India.

Now there is an increasing demand of branded apparel segment in the

domestic retail market for same features that are valued in demanding

export markets. These shifts in retail are fuelling the demand for good

quality and trendy apparel, which in turn deepening the importance of

aesthetics and design in the domestic market. It is worthwhile to

mention that the rise of younger class of middle-class consumers,

spawned by the booming BPO and IT sector, has led to burgeoning

demand for locally designed, ready to wear clothing in Indian

mentors. As many surveys have established, with good salaries,

strong peer pressure and the growing availability of brands across

product categories, spending in retail is being driven by the segment

in large and mid-sized metros.

In India, clothing retail accounts for 36% of organized retail business.

It is the largest sector. Ready-made apparel accounted for an

estimated 20% domestic clothing sales in 2005.11 With growing

working women wearing western wear to work, and pressed for time,

market for good readymade clothes is likely to grow. India is a film-

crazy nation, and the largest producer of films, with more than 1,000

every year. They provide entertainment and an escape from reality for


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India’s masses, and set the popular fashion trend. Bollywood fashions

have become pan Indian. They affect various sectors of the market

including clothing, weddings and fashion accessories.

With the advent of modern format retailers and the growth of plastic

cards, affluent urban Indian women are shopping like never before.

They spend morning browsing in stores looking for deals or latest

styles. Upper income urban women are adopting ethnic chic. These

are designer clothes that incorporate Indian motifs, ethnic fabric and

are a fusion of western and Indian styles.

In the large urban centres, apparel retailers, like Shoppers Stop,

Westside and Pantaloon have popularized their private labels, which

have attracted urban shoppers. Westside carries only its own private

labels, while for other stores, 20% to 30% of their apparel turnover is

from private labels. Customers have loyalty to a store rather than any

particular garment brand. This has led to thriving unbranded or local

brand market for ready-to-wear clothes leading to serve competition.

Hence organized retailers like Lifestyle, for instance, has loyalty

program called ` The Inner Circle`, while Pantaloons offers a` Green

Card` Rewards programmes, Westside has `Club West` to woo

customers. Customers look to design and fit of the clothes, and use

the shop’s name as a quality standard.

According to a report by Data Monitor (2006) 12, global apparel,

accessories & luxuries market is likely to grow by 4.5% annually and

Asia pacific region is anticipated to acquire leadership position by

2011. Apparel sector in India poses a lot of challenges to a marketer.


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So far India`s share in the world apparel trade has been

insignificant(less than 3%). World garment trade is estimated at

around US$125 billion (Rs.5534.1875 billion) annually. The Biggest

manufacturer & supplier is China producing over US$ 50

billion(Rs.2213.675 billion) , followed by Mexico which produces

over 8 billion and followed by many countries like India, Sri Lanka

and Bangladesh, being the third place countries making and exporting

garments worth $ 5-6 billion(Rs.221.3675-265.641 billion) annually.

1.3.4 Characteristics of Apparel Retail Sector

As apparel retail is led by fashion, a player needs to keep a close

watch on fashion amongst teenagers as they are the trend setters. Role

of Bollywood in spreading fashion needs to be understood. Seasonal

variation on stocking pattern and need to clear inventory at the end of

season should be understood by apparel retailer. Typically once an

item is sold from the outlet, retailers ensure that there is no repetition

of same. It gets replaced by different design, style, and colour.

Importance of store layout, decor is very critical. A browser visiting

the store frequently likes to see changes in the layout otherwise he

may carry the impression that stocks are not moving out of store.

Category management becomes very crucial function as transforming

of design into production and delivery has to be completed before

fashion or fad changes in the market.

This highlights the importance of sales promotions- short term

activities which induces trade or consumer to buy now rather than in

future as the value of apparel after the season goes down substantially


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and inventory carrying burden turns out to be very high. Apparel

retailer needs to understand critical role of sales promotions.

Attractive promotions induces purchase acceleration, stock piling and

brand switching on the part of a consumer which substantially

reduces retailer`s financial and inventory risk and consumer`s

financial and psychological risk.

1.3.5 Classification of Apparel

The textile manufacturers were among the first to get into branded

menswear in the Indian market. This sector is perhaps the most

developed in terms of supply chain sophistication in the branded

clothing market. The apparel sector can be broadly classified into

Men’s apparel, Women’s apparel and children’s wear. Each of them

can be further classified into Formal, Casual, Indian wear, Sports

Wear and Accessories.

Apparel

Women’s wear Children’s

wear

Menswear

• Belts

• Ties

• Socks

• Handker-

chiefs

• Track

suits

• Shorts

• T-shirts

• Kurta

• Pyjama

• Dhoti

Kurta

• Sherwani

• T-shirts

• Shirts

• Jeans

• Casual

Trousers

• Shirts

• Trousers

• Blazers/

Jackets

• Suits

Fig.1.5 Classification of Apparel


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The same classification can be reworked for women’s wear and

children’s wear. Thus we can see that this sector has many

classifications and sub-classifications adding to the complexity and

the competitiveness of this sector. Apparel Retail in India is

characterised by the existence of a large number of regional, national

and international brands.

Another important characteristic is that retail occurs through multiple

formats, for example an Arrow shirt would be retailed through stores

like Shopper’s Stop, Pantaloon, etc and also through the company’s

own retail outlets.

In menswear, the key players are Arvind Brands, Madura Garments,

Raymond’s/ Park Avenue.

1.3.6 Key Menswear Brands

Formal wear Casual wear Denims Sports wear

Arrow

Louis Philippe

Van Heusen

Park Avenue

Allen Solly

Color Plus

Dockers

Benetton

Wills Sports

Levi’s

Lee

Wrangler

Pepe

Ruf n Tuf

Reebok

Nike

Adidas

Table 1.1


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In India, a national brand in women’s wears is virtually non-existent.

Most branding that is visible in women’s wear is only in the western

casual clothing segment. However, this is a growing segment where

sizeable opportunities exist in the women’s ethnic wear. Allen Solly,

a leading brand in menswear, has entered the women’s western wear.

Local manufactures again rule a large section of the children’s

clothing market though a few national brands line Gini & Jony and

Ruff kids have emerged in the market. Invariably, these brands started

by retailing within larger department stores before setting up their

own and franchised retail outlets.

Apparel retail occurs through a company’s own outlets or through the

multi brand outlets. Over the past few years, this sector has seen the

development of private labels by many department stores.

1.4 Lucknow Division

Lucknow Division is an administrative geographical unit of Uttar

Pradesh of India. Lucknow is the administrative headquarters of the

division. As of 2005, the division consists of Lucknow district,

Hardoi district, Lakhimpur Kheri district, Raebareli district, Sitapur

district and Unnao district.

Uttar Pradesh is now divided into seventy one districts under eighteen

divisions. Districts are administered by District Magistrates and

divisions are administered by Divisional Commissioners.Lucknow,

the capital of the state, constitutes the Lucknow district.


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The Indian state of Uttar Pradesh borders with Nepal and the Indian

states of Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Rajasthan,

Haryana, Uttarakhand and National Capital Territory of Delhi.

1.4.2 Lucknow District

Lucknow District is a district located in the Uttar Pradesh state in

northern India. The city of Lucknow is the district headquarters and

the district is part of Lucknow Division and also is the capital of Uttar

Pradesh. The City was established in 1775 as the nawab of Awadh

moved his capital from Faizabad to Lucknow and made it one of the

most prosperous and glittering cities in all India.


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1.4.3 Economy

The economy of Lucknow city was earlier based on the tertiary sector

with about majority of the workforce being employed as government

servants. Large-scale industrial establishments are low compared to

other north Indian state capitals like New Delhi and Chandigarh.

Currently the economy is growing with the contributions from more

professionals in the fields of IT, Manufacturing and processing and

Medical/Bio-Technology. Business-promoting institutions viz. CII

and EDII have a presence in city. On October 2010, Lucknow ranked

6th among all the cities in India for fastest job-creation, City has

steadily grown into a competitive IT centre.

Lucknow has a great potential in handicraft sector and it accounts for

60% of the total exports from the state. The state has emerged as a

hub for IT and ITES industries including software, BPOs and

electronics. The major export items from are marble products,

textiles, handicrafts, art pieces, gems and jewellery, textiles,

electronics, software, computer, hardware & software, apparel, brass

work, silk, leather and leather goods, glass items, art metal,

chemicals. City has promoted Public‐Private Partnerships in big way

in various sectors such as power, roads, expressways, education.

1.4.4 Demographics

According to the 2011 Census Lucknow district has a population of

45,88,455. This gives it a ranking of 31st in India (out of a total of

640). The district has a population density of 1,815 inhabitants per


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square kilometer. Its population growth rate over the decade 2001-

2011 was 25.79 %. Lucknow has a sex ratio of 906 females for every

1000 males and a literacy rate of 79.33 %.

1.4.5 Chikan industry of Lucknow - Pride of India

The chikan work of Lucknow is one of the most popular embroidery

works in India. It has a certain grace and elegance which ensures that

it never goes out of style. It is said to have been originally introduced

by Nur Jahan, the beautiful wife of Mughal emperor, Jahangir. The

work became popular in a number of important cities of indo-

gangatic plain.

The designs depend for its effect on the variety of stitches and

different grades of threads used to form the patterns which includes

the lace like jali, the opaque fillings and the delicacy or boldness of

outline and details. Tiny raised flowers done in what seem to be

French knots are balanced by the flat stem stitch and large areas of

open work to prevent either a crowded or too scattered appearance.

The stitches employed are back-stitch, chain stitch, and hemstitch

forming an open work pattern.

Individual floral motifs may embellish the entire garment or just one

corner. Among the floral motifs embroidered, the jasmine, rose,

flowering stems, lotus and the paisley motif are the most popular.

Chikan work has very light, gossamer - like quality. This makes it

very suitable for the seemingly hot climate.


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Some of the popular motifs are Kairi; dhaniya patti; phanda; dhum

patti; ghas, patti; murri; kangan; joda murri; maharaki; sadi-maharaki;

daraz/ katub; pechani; tanire; gitti; phanda; keel; kangira.

A Chikan suit is a regal treasure in any fashion connoisseur's

wardrobe. Really the great thing about this form of embroidery is that

it never goes out of fashion and it suits women/ men of all ages. If

you are going to invest in a few pairs of elegant wear, try adding

chikan to your wardrobe. If you wear chikan you really are wearing a

piece of history, as it is a form of embroidery that has been art part of

India for centuries.

Chikan embroidery in Lucknow is the biggest artisan cluster of India.

There are about 5 lakhs artisans of hand embroidery associated with

this cluster. Apart from this, the artisans from other fields such as

cutting, stitching, Hand Block Textile Printing, jali work and washer

men are also a part of this cluster. The total number of artisans

associated with Chikan Embroidery, Cluster, other than Chikankari

artisans, is about 5000.

There are about 4000 manufacturing units in Lucknow having

individual turnover of Rs.10 crore to 10 lakhs. The total turnover of

industry is about Rs.1000 crore including export out of India of about

Rs.200 crore.


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1.4.6 Sitapur District

Sitapur District is one of the districts of Uttar Pradesh state of India,

with Sitapur town as the district headquarters. Sitapur district is a part

of Lucknow Division. This district covers an area of 5,7432 km.

1.4.7 Economy

In 2006 the Ministry of Panchayati Raj named Sitapur one of the

country's 250 most backward districts (out of a total of 640). It is one

of the 34 districts in Uttar Pradesh currently receiving funds from the

Backward Regions Grant Fund Programme (BRGF).

Agriculture is the main occupation of the district. The important crops

are wheat, Rice, Urad, Sugarcane, Musturd and Groundnuts. The

district was very famous for its textile industries during 17th and 18th

century, but now it is not famous from industrial point of view. There

are five sugar mills, flour mills and rice mills in the district. It is

mainly famous for its cotton and woolen mates.

1.4.8 Demographics

According to the 2011 Census Sitapur district has a population of

4474446. This gives it a ranking of 38th in India (out of a total of

640).The district has a population density of 779 inhabitants per

square kilometer. Its population growth rate over the decade 2001-

2011 was 23.62 %. Sitapur has a sex ratio of 879 females for every



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1.4.9 Lakhimpur Kheri District

Lakhimpur Kheri is a district of Uttar Pradesh in the Lucknow

Division. It is located in India along the border with Nepal. The

headquarters of the Lakhimpur Kheri District are situated in the city

of Lakhimpur. Lakhimpur Kheri district is a part of Lucknow

Division and is the largest district in terms of area in the state (Total

Area = 7680 square km).

Lakhimpur Kheri is famous for Dudhwa National Park, the only

National Park in Uttar Pradesh.It is home to a large number of rare

and endangered species including tiger, leopard, swamp deer, hispid

hare, Bengal florican, etc. Being a Terai district it is rich in natural

resources with lush green scenery and many rivers.

1.4.10 Economy

In 2006 the Ministry of Panchayati Raj named Lakhimpur Kheri one

of the country's 250 most backward districts (out of a total of 640). It

is one of the 34 districts in Uttar Pradesh currently receiving funds

from the Backward Regions Grant Fund Programme (BRGF).

Known for its sugar cane industry, it satisfies a huge part of theworld's sugar demands. Some of the biggest sugar mills are in the

district Bajaj sugar mill in Gola Gokarnath and Bajaj sugar mill in

Palia Kalan and DSCL sugar mills (Ajbapur), Kumbhi sugar mills

Kumbhi, (Mohammdi) are the four largest sugar mills in Asia.

Balrampur Industries also runs its sugar mills from Lakhimpur.

Lakhimpur is also famous for cottage industries of incense sticks.


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The main industry which dominates Lakhimpur Kheri is the sugar

industry. It houses various sugar industries ranging from small plants

to big integrated sugar mills.There are many private, government and

co-operative sugar mills in the region. Steel Authority of India

Limited (SAIL) is setting up a steel processing unit in Behjam,

Lakhimpur at an estimated cost of Rs 85 crore. The processing unit

will have an installed capacity of 100,000 tonnes per annum and

produce TMT (Thermo Mechanically Treated) bars from input

material sourced from SAIL’s integrated steel plants.

1.4.11 Demographics

According to the 2011 Census Lakhimpur Kheri District has a

population of 4013634. This gives it a ranking of 56th in India (out of

a total of 640). The district has a population density of 523

inhabitants per square kilometre. Its population growth rate over the

decade 2001–2011 was 25.14 %. Kheri has a sex ratio of 887 females

for every 1000 males and a literacy rate of 62.71 %.

1.4.12 Raebareli District

Raebareli is a city and a municipal board in the Indian state of Uttar

Pradesh. It is the administrative headquarters of Raebareli District.

In 2006 the Ministry of Panchayati Raj named Raebareli one of the





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According to the 2011 census Raebareli district has a population of


640). The district has a population density of 739 inhabitants per

square kilometre .Its population growth rate over the decade 2001-

2011 was 18.51 %. Rae Bareli has a sex ratio of 941 females for

every 1000 males, and a literacy rate of 69.04 %.

The town of Unnao is the headquarters of Unnao District in Uttar

Pradesh, India between Kanpur and Lucknow. It is approximately

18 km from Kanpur & 60 km from Lucknow . It is connected to these

two cities by roadway as well as by railway. The nearest airport is at

Amausi about 50 km from Unnao. Unnao district is a part of Central

Ganges Plain of the state covering an area of 4558 square km.

In 2006 the Ministry of Panchayati Raj named Unnao one of the




According to the 2011 Census Unnao district has a population of


640). The district has a population density of 682 inhabitants per


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square kilometre.Its population growth rate over the decade 2001-

2011 was 15.19 %. Unnao has a sex ratio of 901 females for every


Hardoi is a riyasat and a municipal board in Hardoi district in the

Indian state of Uttar Pradesh. It is the administrative headquarters of

Hardoi District.

In 1901, the main activities were wood-carving industry, saltpetre

works and grain trade. The district exported grain, sugar, hides,

tobacco and saltpetre.

Agriculture is the main activity in the district and many people

depend on it. 3980.45 square km. of Hardoi district are devoted to

agriculture. The main crops are paddy, sugarcane, wheat, vegetables,

pulses and oilseeds. A small proportion of the total cultivated area is

used for horticulture: guava, mangos, some herbs, etc. Irrigation is

made possible by the presence of the Hardoi and Lucknow branches

of the Sarda Canal.Generally people of the district depend upon the

Agriculture based economy.

As of 2011 India Census, Hardoi district had a population of

4,091,380. Males constitute 54% of the population and females 46%.

Average literacy rate of Hardoi in 2011 were 68.89% compared to


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51.88 of 2001, lower than the national average of 74.9%: male

literacy is 77%, and female literacy is 59%. In Hardoi, 13% of the

population is under 6 years of age.

1.5 Literature Review

There are many authors and researchers who have worked in this area

but the contributions of some of them have been included in this

study to make it more comprehensive and valuable.

According to Koshy (1997),13 fashion garments are differentiated by

innovative fabrics and / or substantial use of trims, embellishments

and / or presence of high degree of craftsmanship in the form of bead,

sequin work and / or sophisticated design, colour and styling inputs.

Bagchi (1997)

14

critically examined the removal of quota between1995 and 2005 in four phases is not as beneficial as it is projected by

developed world. The first two phases are composed of goods which

are not of high importance and already almost free. These two phases

are not of high importance. The other two phases are of high

importance.

Chandra (1998) 15 in his article wrote on challenges ahead of Indian

textile and clothing industry in post quota regime. It put special

emphasis on production capabilities and efficiencies as most essential

elements to fight global competition. It suggests various strategic

decisions Indian textile manufacturers have to make to survive the

competitiveness in post quota regime.


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Bhamra, Heeley and Tyler (1998)16 describe ‘conventional

approaches to product development in textile and clothing industry

have been characterized by functional independence. Each participant

contributes to the process sequentially.’

Verma (2001)17 in his article emphasized on the impact on the Indian

textile and clothing industry after quota elimination. It says that

Indian textile and clothing exporters have to bring in necessary

changes in their methods of production, management style, capacities,

marketing skills and productivity level in order to remain competitive

in international market. Also it put special emphasis on the size of

Indian textile units when compared to its counterpart in China.

Simpson and Shetty (2001)18 did a vast study on India’s textile

industry. The purpose of study is to analyze India’s textile and

apparel industry, its structural problems, market access barriers, and

measurements taken by government of India to enhance the industry’s

competitiveness in the post – Multi Fibre Agreement (MFA) era. The

study also assesses India’s textile and apparel market potential and

trade and investment opportunities for U.S. firms as India steps into a

more free and transparent trade regime.

Verma (2002)19 did a comprehensive study with objective to evaluate

the export competitiveness of Indian textile and clothing sector.

Because Indian textile and clothing sector is predominantly cotton

based, the study is focused on cotton textile and clothing and look at

the entire value chain from fiber to garment and retail distribution.


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Leung and Taylor (2002)20 in a study on fashion buying criteria of

X generation consumers in Hong Kong found that consumers of this

category are attracted by a good interior store layout; and feel good

service is essential when buying fashionable clothing.

In the Indian context, a study was done by Sinha et al. (2002) 21 on

store choice behavior that indicated Indian shoppers on an overall

basis give importance to proximity of the store, merchandise and

service provided by the store and stores dealing in apparels are also

chosen based on ambience.

Kincade, Doris H; Woodard, Ginger A; Park, Haesun (2002)22

studied Buyer-seller relationship for promotional support in the

apparel sector which is critical for success.

Willans (2002)23 says ‘several fashion retailers have adopted a

concept known as ‘edited retailing’ whereby the customer is offered a

limited though changing choice of merchandise that is highly co-

ordinated, offering a high degree of product range compatibility.’

As per Moye and Kincade (2003),24 the occasion for which an

apparel item is bought does influence the consumer’s importance

rating of the store environment and there were higher expectations for

the environment of a store offering formal merchandize than a store

offering casual merchandize.

Meenakshi (2003)25 did a comprehensive study on the opportunities

that would be provided by WTO to Indian Textile industry. This

paper gives a lot emphasis on new capacity installation to take the


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benefits to the fullest extent in India has to be a true gainer in

competition to other nations. Since India’s own consumption per

capita is also on the rise with the rise of income and consumption

habits, the profit margins available to Indian textile and clothing

producers will be more. But in export market, the prices will be

driven by international factors and profits will be under pressure. So

the exporters might have to go for strategy of partial exports and

partial domestic sale.

Pandey (2003)26 in his article expected that Indian textile exporter

would be benefited with quota elimination. It discusses on various

sectors of textile and clothing. Also he expects that hosiery industry

will be one of the gainer and small scale exporters will be more

competitive due to small size and controlled cost and lower

overheads.

Vivek (2004)27 in his article had said that JC Penny a leading retail

chain of US looks India for sourcing its garments in woven and

hosiery. He is of opinion that India will be fulfilling its major need of

Hosiery and woven garments in cotton while China will be good for

synthetic fabrics and its garments.

Chugan (2005)28 emphasized that Indian textile Industry has to

change to be more competitive in the long run. This paper emphasizes

that merely cost competence is not enough to maintain the lead while

Indian companied has to have a global competitive view.

Trivedi (2005)29 in his article concluded that the textile is one sector

where India has high ambitions and can achieve robust growth


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through moderate human skills. India has skilled labour and does

better in this sector as compared to others. This will also increase the

employment and the social structure will be better off.

To quote Panthaki (2005),30 the textile industry in India is vital to the

economy of the country as it contributes to over 6% of the gross

domestic product to India and earns 18% of the total foreign exchange

earnings of the country.

The present garment segment of the textile industry provides

employment to around seven million people (Apparel Talk, 2005).31

Fashion as part of history repeats itself and is defined as the

prevailing style in clothing at any given period of time write Amaden

and Crawford (2005).32

Paromita Goswami (2007)33 conducted a study on how college

students in urban areas shopped for apparels. The factors investigated

for the study were brand conscious and needed variety and best

quality for their apparel purchase. Furthermore, parents influence

their purchase behavior the most, followed by peer store approval,

friends’ influence and peer product influence.

According to Kunz and Garner (2007), 34 the textile and the apparel

business provides employment for more than any other business

segment, directly providing a livelihood for many millions of people,

including 37 million individuals in India alone.

Dr.Biradar et.al. (2008)35 in their article pointed out that the

organized retail sector is registering tremendous growth fuelled by


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the unleashed spending power of new age customers who have

considerable disposable income and willingness to have new

shopping experience. It is emphasized that India’s top retailers are

largely lifestyle, clothing and apparel stores followed by grocery

stores. The paper further mentions that increasing number of nuclear

families, working women, greater work pressure and increased

commuting time; convenience has become a priority for Indian

consumers. All these aspects offer an excellent business opportunity

for organized retailers in the country.

Designers have acknowledged that they alone cannot decide what

their customers want and they are offering as more of fashion to

consumers’ attention, opine Diamond and Diamond (2008).36

According to Kumar and Sunderesan (2010), 37 textiles are among

the leading sectors in the Indian economy in terms of production,

exports, employment and contribution to the exchequer.

India earns around 27% of the foreign exchange from exports of

textiles and related products remark Gopalakrishnan et-al (2010).38

As competition and pressure on profit margin grow, fashion

manufacturers are looking wider for inspiration on how to maintain a

competitive business (The Indian Textile Journal, 2010).39

Fashion today is not restricted to grown-ups, but kids too are

becoming fashion conscious these days especially when it comes to

dressing (Apparel Online, 2010).40


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Fashion has truly become a serious business in India, according to

(Textile Trends, 2010).41

As per Amsamani and Punna (2010),42 there is now a buzz in the

fashion and high tech industries about integration of technical and

smart intelligent functionality into fabrics for clothing.

With fashion rapidly becoming „a must have for the masses and

technology playing an important role in making it viable to

incorporate fashion elements at reasonable prices, the retailers around

the world are also embracing this change. „Leggings seen as a

fashion forward statement in the 80s is now a universal trend that has

become mainstream fashion and these versatile fashions are the

fashion world’s latest obsession (Apparel Online, 2011).43

Considered as one of the largest employment generator, the Indian

textile industry provides employment not only to people involved in it

but also to various ancillary sectors like agriculture and recent survey

has revealed that the textile industry contributed twelve million jobs

in the year 2010 (Indian Textile Journal, 2011).44

In this contemporary world of fashion, where dressing is a powerful

form of expression, more and more youngsters are adopting

“character inspired merchandise” by wearing their favorites cartoon

and comic characters on their T-shirts (Apparel Online, 2011).45

1.6 Purpose of the Study

Retailing is a new emerging section of the economy having a lot of

potential to contribute maximum to the GDP. In the days ahead,


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competition is bound to be stiff. In this way all players of the

industry, that is, buyers, sellers and competitors, should keep

themselves updated with current happenings and trends of the

industry. It is only possible with the help of Research and

Development (R&D) because by using this mean, anybody can have a

clear cut knowledge about the real scene of the industry (apparel

industry).In this regard, the present study will be proved as a very

useful and vital tool for all concerned users and it will provide

approximately all the pertinent facts about apparel retailing.

1.6.1 Objectives

Every study is based on certain problems and in the whole various

alternatives (solutions) regarding these are researched and evaluated.

In this way, every study has some specific motives to be achieved by

using various tools of research. In case of present study, the industry

of apparel retailing is facing a lot of problems in the form of

following questions. What to do, how to do, are certain questions,

which are looking out for answers. But, no qualitative work has been

done to address these problems, the present study will make an

endeavor to find suitable answers. The present study will:

1. Analyze the key trends that are taking place in apparel retailing.

2. Assist in creating awareness of the developments in apparel

retailing with respect to various product categories.

3. Help to know the drivers responsible for the growth of organized

apparel retailing and new retail formats.


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4. Evaluate India’s preparedness in th

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Apparel Retailing

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