Payless Shoesource has India on radar as huge opportunity, says Executive VP

Payless Shoesource is setting up base in India with stores in Mumbai, Bangalore, Hyderabad, Kochi, Coimbatore, Madurai, Mangalore, and Mysore. An American discount footwear retailer headquartered in Topeka, Kansas, it started franchisee business in India in association with Reliance Retail Ltd Payless currently has about 4,400 stores in more than 30 countries around the world.

Steve Gish, Executive Vice President, Payless ShoeSource, and Gopalakrishnan Sankar, Reliance Retail's CEO of Footwear Business talked about the company's entry into India and their expectations of how the business is likely to shape up. Edited excerpts from an interview with Business Today's Ajita Shashidhar and Arpita Mukherjee:

ON THE BRAND'S DELAYED INDIA ENTRY:

Gish: Payless was founded by two cousins in Topeka, Kansas, in 1956. We were exclusively in the United States till we opened stores in Puerto Rico (Commonwealth of Puerto Rico) in 1992, then we went to Canada in 1997... It took us a long time to work out the courage to go to the international market and what we found from the start is that our brand works really well around the world. And it works particularly well in emerging markets that are growing quickly and there is an emerging middle class, which is why on trend products with great value makes it the kind of place where people will shop.

Then we went to Latin America in the year 2000, then Central America, Caribbean, South America have grown up to be a very big business.  Now we have 325 stores in Latin America… In 2009 we started to do franchising. So we have started fairly recently in the franchising business and we have always have had India on our radar as a huge opportunity and we connected with our friends at reliance. We think they're the right partner and we're fortunate to be in business with them. Great experience across a lot of businesses, particularly retail. So it sounds perfect.

ON PRODUCTS AND MARKET:

Sankar: This is value fashion. The idea was to convert a lot of the unorganised market today in footwear, which is as high as 60 per cent, to the organised fold. The price range here typically you could fit most of it between Rs. 500 and Rs. 2500. It's a tight range.

We're looking for serious market leadership in the (footwear) segment, and you achieve that with different formats. We have an existing format (Reliance Footprints), which is doing its job. Then we have Payless, which is in the value segment, also the broadest segment. Because the prices are attractive and it is a family store, it can travel far and beyond. It can go beyond the first 100 top cities. So you can open as many stores as the market can take. So it's a big vehicle to capture market share in a short period of time. Footprint we have crossed 200 stores across 100 cities, and this (Payless) has the potential to go well across 100 cities. It could go to tier 2 cities, tier 3 also. We'll experiment.

At Footprint you can find a shoe for Rs. 11000, while Payless we're talking about a tight fashionable range of Rs. 500 to Rs. 2500. Most of the Payless stores are going to be between 1500 to 2000 sq ft.

ON SKUS AND STYLES:

Sankar: We're talking about at least 600 to 700 unique options of shoes alone and that leaves the size out and we will have each one in every possible size you can think of. It's like a destination store.

Over a period of time we will develop India specific styles for India: Kolhapuri, some mens' formals which are very typical, some leather collections that are only found here. And, India has a big taste for leather. So to fill these gaps we will also do some products from India. At this point in time 100 per cent of what you see is like what you would see elsewhere.

ON THE OVERALL FOOTWEAR MARKET:

Sankar: Everyone quotes their own figures, but according to me the total shoe market in India is about $4 million and about a third of it is organised. It is a growing market and what is important to know is that nobody has a substantial market share. It's probably growing at about 12 pct per annum and nobody has run away with the market. And we have serious intentions of capturing significant market share.

ON PROMOTIONS:

Sankar: There are collections every month. So there is something new all the time. And the shop is a far more promotional and fast changing environment. As a country America is far more promotional than India and Payless is a fairly energetic, vibrant and promotional brand. We hope to bring in all that with eight to ten promotions every year related to time, seasons, or festivals. It's all well organised.