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!
Bottomline
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!
