Thursday, January 05, 2006

Steve & Barry's in India

Steve & Barry’s, a US chain catering to collegians, is soon launching in India, according to HT

"The buzz is that it (Steve & Barry's) has recruited five people from Shoppers Stop. The US chain is offering a 40 to 50 per cent rise in salaries and the promise of a global experience".

Pardon my ignorance - I had never heard of Steve & Barry's. But an apparel chain catering to collegians piqued my interest and a google search yielded a wealth of information. ABC News provided the best summary:

In the summer of 1979, 15-year-old buddies Steve Shore and Barry Prevor started out in business with a megaphone and piles of excess-inventory T-shirts they sold for $1 each at flea markets across Long Island.

In college, they opened their first Steve & Barry's University Sportswear store at the University of Pennsylvania, charging fire-sale prices for T-shirts and sweat shirts emblazoned with college names.

Their low cost, casual clothing chain moved off campus for the first time in 1998 to a mall in Auburn Hills, Mich., and underwent a rapid expansion. Their 100th store opened in this Rochester suburb in November and they expect to swell to 200 stores inside a year and top 5,000 someday.

100 new stores in 7 years is impressive! The USP of Steve & Barry's appears to be 'cheap and cheerful'. Everything from cargos to jeans and sweatshirts sells for under $ 10.

Says co-founder Prevor: "McDonald's changed hamburgers, Home Depot changed hardware. Basically we're saying it's the same thing with clothes. There's no reason people have to pay five times the price for the items we're selling."

How do they do it
Analysts estimate that Steve & Barry's markups are just 2 - 20 %, far below the apparel industry's 54 % average. The secret of being able to sell cheap is buying cheap. Apparel Resources says: The company is an expert in international tariffs and sources merchandise from America, Canada, Central America, India, Mexico, Pakistan and a few other countries.

Their other successful business management stint includes purchasing merchandise off-season for a better price and allows manufacturers ship in full truckloads.

Apparently 40% of Steve & Barry's merchandise is now sourced from India. So it makes good sense to sell some of that stuff in India as well.

India already has an 'export surplus' type markets - Fashion Street, Sarojini Nagar. But now the bargain basement shopping concept has been picked up by organised retail. There are the 'family type' places like Big Bazaar, the reasonably-popular-with-youth Vishal Megamart and the most promising of the lot - Pantaloons 'Fashion Station'.

Fashion Station is a first of its kind fashion outlet spread over 15,000 sq ft and is located in the NCR region’s largest mall. The outlet will house a wide selection of trendy apparel for today’s fashion conscious people at value prices. The USP of the store is "Fashion that fits your budget".

A good concept but not many outlets so far. The only Fashion Station I know of in Mumbai is in Mulund.

So yeah, I think Steve & Barry's has great potential to become a popular youth shopping destination. 'Everything in this store Rs 499 or less' is an unbeatable proposition. You'd go there once at least to see what they stock.

Like McDonald's 8 rupee icecream, they should consider offering a ridiculously low price on a few basic items. 'T shirts for Rs 99', anyone? If quality is decent - public will come. In hordes.

The college sweatshirt
One of the items Steve & Barry's appears to be famous for is college sweatshirts. In the US Steve & Barry's has licensed apparel from 350 colleges - the University of Michigan is their best seller nationally. According to Forbes magazine, today college apparel is less than a third of sales, but it still drives Steve & Barry's image.

I can't help wondering whether they will attempt similar licensing deals in India. Wonder what the Principal of St Stephen's or St Xavier's would say to such a proposal. Nope, can't see it happening. Imagine the kind of internal and external debate that would take place! The TV news channels would have fodder for weeks!

In price and value conscious India I think a Steve & Barry's kind of mindset will click. As the success of dollar stores has shown, people are willing to make impulse purchases at psychologically appealing price points.

The other, more favoured method of building a brand is to advertise a lot and then hope people walk in and buy your over-priced goods. That's what Tommy Hilfiger, Nine West, Guess and a host of international apparel/ accesory brands have been trying. It appears to me, without much success.

At Steve & Barry's the advertising budget is less than 1% of revenue. With that kind of attitude you'd better get your merchandise and pricing mix right!

A bit of friendly advice: don't sell us bottom-of-the-barrel stuff that has been rejected by the rest of the world. We Indians are difficult-to-please customers - don't take us for granted.

Humko style bhi, size bhi, aur sasta bhi mangta hai. Tall order - but then you are Steve & Barry's. Surprise us!


  1. steve and barry? sounds gay!

  2. There is a Steve n Barry's store at the mall close to my house in New York.
    It said $7.98 for everything. Jackets, T-shirts, bags, everything.Quality was impressive. I got my hands on a Temple University T-shirt, something I never did during my 4 years of college there . And guess what, the label said, "Made in India" !!

  3. Amrikan company..Indian Make..International Brand...Good Marketing...Low cost price.
    This thing will sell for sure.!!

  4. this is damn cool!!!!! It is such a welcome change from atrocious stores such as Marks & Spencers or Mango!..I'm eagerly looking forward to them....but asking for a 99 rs t-shirt is asking for too much from an international chain! ;)

  5. we are demanding less but want more..

    we get what we deserve..

    we get all the following all the time as if these were on demand..

    roads,politicians,social injustice,corruption,adulteration,female infanticide,dowry,pollution,fake godmen,hypocrisy,casteist prejudice etc

  6. your concluding lines are very true!
    We want more for less, we are Indians!!!!!

  7. Your insights on the indian consumer are commendable.I woud like to invite you to read my blog and drop in your comments.

  8. I first shopped at Steve and Barry's when I moved to College Station (Texas A&M)and was really impressed with their rock-bottom prices especially in college apparel which is frightfully priced; more so for students. The quality is not that great but just right for the price. If you use a $9 tshirt or sweat shirt 4-5 times, its paisa vasool. I definitely think that S&B will make inroads in the Indian market. Merchandizing Indian college apparel is a whole diff.issue unfortunately

  9. Would be interesting to know how the firangs fare against the Big Bazaar mite!

  10. this all seems reminiscent of the british era when they sourced cheap raw material from here and sold expensive finished goods in our country.the only difference now is that they source finished products from our country.i think this is globalisation.let's just hope the the stuff is good.

  11. This comment has been removed by a blog administrator.

  12. this is damn cool!!!!! It is such a welcome change from atrocious stores such as Marks & Spencers or Mango!..I'm eagerly looking forward to them....but asking for a 99 rs t-shirt is asking for too much from an international chain! ;) ~ Vikram H

    What caught my attention was the above comment and the mentality in the underlined line. Something I call the "Slave Gene" or "Raj Residue". Why is it "too much" to want a product at an affordable price?

    Vikram's comment seems that suggest that in case they were not an MNC, the price would not have been "too much". In case the poster does not realize, these guys make that stuff in India, with Indian cotton, with Indian labor, slap a freakin label and sell it to you for the price they want. Why would I want to pay exorbitant prices for something that otherwise would have cost less?

  13. Vikram has mentioned in the comment about Marks and Spencers. yes, very true. Their pricing is terribly high. I understand they are an upmarket brand, but from what we hear, they source from Tirupur or Mumbai, slap (as said by propeller) their label and charge exhorbitantly high prices (for eg. 3K upwards for a shirt) on them, thus robbing us of our precious money and sending back to the parent in UK. This is ridiculous. I used to think about this "use swadeshi products " campaigns as dumb when I were young, but slowly I realise, we were being fooled by the British during British rule and now being fooled by the whole world!!!
    Rashmi, could you throw us some light on this, regarding these MNC brands.. I don't know completely about their mode of operations, like whether their Indian operations' money remains here or fills their coffers in the parent country? Since you may have some insight on this, please let us know. Thank you!

  14. Wow...This is going to be next excitement for T-shirt buyers like me..The Steve and Barry here in MA is not close from my house at least. But will be going to visit in Mumbai for surely.great to know this.

  15. hi Rashmi,

    I have been reading your blog for quite sometime now & find it really informative ...
    As far as I know.. Marks & Spencer shirts are made in a Factory in Indore,MP..& there may be other such factories in other places also...
    As Mr. Venkatraman said...would like to know how this thing works... Is there any percent of profit shared with the factories that actually produce such good stuff or just the parent company that gets everything by just putting its label...
    True ..that the label sells.. but it wouldnt stand anywhere without that quality...

  16. There is a mass-market sweet spot in the Indian landscape just waiting to be discovered by retailers. The problem in finding it is getting the 'sasta-sundar-tikau' equation just right. Excessive weightage on any one of the variables will make the whole thing crash or require a drastic ( and maybe expensive) mid-course correction.

    That & reach.

  17. Marks & Spencer is a total scam. I visited the outlet in Inorbit Mall a couple of times and decided that I couldn't even afford a pair of briefs! Okay maybe I could - but buy no stretch would I ever buy briefs for 4-500 rupees, ever. When I go to the US, I can pick up Calvin Kleins from Marshall's for much cheaper.

    The shirt prices are equally ridiculous. The only M&S brand line that I actually liked was Woodspice (after-shaves and shower gels that were actually affirdable) and obviously they have discontinued carrying those. Maybe selling a shower gel below Rs.500 was too demeaning for them!

    But why blame them? People still buy from them because of the snob value. There are always a couple of customers buying shirts and other stuff. If we buy, they will sell, as simple as that. It's a different matter that the snobbish buyers are being taken for a ride because a cursory examination of the seam and stitching shows that the quality is nowhere commensurate with the price, which is the explanation given by many who have a habit of buying high end brands. And that is why it's a scam.

  18. Excellent report - will look forward to it being reposted on

  19. Steve and Barry's has its own office in Mumbai by the name 4004 Incorporated.
    Not much people are aware of it, however all the back office operations are carried out from the office in Mumbai.

    4004 Incorporated is situated amongst the most noticeable heritage compositions in the vicinity.
    Built during the British era, the building has over 100 years of history in its stride and is enhanced with flawless architectural statistics. The office accentuates the concept of change and enhancement of our work processess to support the ever growing employee strength at 4004 Incorporated. It has a capacity to accomodate over 700 employees.

  20. 4004 Incorporated is a US based company founded in 1985 by Steve and Barry who set out to open a new kind of “On Campus” collegiate apparel store and thus established Steve & Barry’s Sportswear, their flagship brand. Their mission is to offer the largest selection of high quality graphics with college names and garments to students as well as the university communities, at prices substantially lower than those previously available. Today it has licenses of several American Universities & Colleges and is one of America’s Top 20 Retailers of Licensed Collegiate Sportswear.

    The company has grown extensively over the last few years and now owns and operates several retail stores throughout the U.S.A. – on the campuses of some of the most prestigious universities and in shopping malls as well. Along with specializing in licensed merchandise the company has now ventured into the Casual Wear Segment as well and is building its own brand. The product range includes jackets, jeans, khakis, T-Shirts, sweatshirts, sweatpants, shirts, polo shirts, shorts, jerseys, hats, nylon pants, sweaters and much more at prices that are generally at least 50% lower than the prevailing prices at college bookstores and mall locations.

  21. I have even found things for $3.98 at Steve & Barrys and that is wonderful since we have 3 kids that always need new clothes!

  22. Steve & Barrys is gonna rock if it plans to launch in India. S&B will change the face of indian market. People will enjoy their clothing style in affordable prices.

  23. I've tried S&B s'shirts couple time when I was on East Coast, but not impressed at all. Not that I was looking for quality merchandise like Nike etc for S&B price tag, but they were quite below the Par.

    Thumbs down.

    India already have tons of low baller like S&B.


  24. Allow me to share with you the latest stunt pulled by Steve and Barry's. Myself along with others in my state, (Ohio) were RECRUITED by S&B for full time employment as Loss Prevention Agents. Some of us left jobs we worked at for 7 years and longer. We were told there was a wealth of opportunity and plenty of room for advancement. The entire "job pitch" was too good to pass up. We came on board, and 6 weeks later, (3 days after Christmas) we went in to work, we were locked out of our computers, called up on the phone and told due to cut backs and low financial standing we were now terminated. We were told to hand over our equipment to the store director, then we were escorted out of the building. Basically, they hired us for Christmas help but represented it as full time, long-term employment! I have the "offer letter" to support that. We did nothing wrong. As a matter of fact I was performing above the average in my district and quite a few other districts as well. This is how this company operates and it will catch up with them one day. They have devastated allot of good people, luring them from their existing jobs with lies then throwing them out like yesterday's trash. I only purchased one Steve and Barry's shirt in the short time I was employed and the next time my dog has an accident I'm going to put it to good use.

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