High Street Essentials hits the pause button on offline expansion as focus shifts online
Given the current environment in which fashion brands are struggling to make a comeback amid a two-month long shutdown of retail stores, High Street Essentials (HSE), which owns popular fashion brands like Faballey, Indya and Curve, has decided to hit the pause button on its offline expansion and focusing on the online business to tide over the Covid-19 crisis.
HSE’s offline retail business was down 80 percent, due to the disruptions caused by the Covid-19 pandemic. However, it also witnessed a surge in online sales. The company recently raised Rs 21 crore ($2.8 million) in a fresh round of funding and plans to use the funds to further strengthen its online business by launching new initiatives and technology advancements.
Here, in conversation with FashionNetwork.com, Tanvi Malik and Shivani Poddar co-founders of HSE talk about the impact of Covid-19, funding, and future plans.
Fashionnetwork.com: What is the impact of the Covid-19 pandemic on sales and what steps has HSE taken to cope with this? How are you managing this situation?
Tanvi Malik: With low discretionary spending, our business and sales have dipped. Overall, the fashion industry in India has seen a 55-60 percent decrease post-Covid.
To cope with these uncertain times that Covid-19 has brought along, we have had to do some quick and intelligent pivots. We realized that fashion is intrinsic and while its consumption may go down, it will never go away. We did a deep dig into what our customers need through this new way of life and decided to venture into categories and streams that are relevant to them and the business at this point.
In May, when cities had begun to open, we launched a line of non-surgical protective face masks to enable people to move out comfortably. These were first launched on our brand websites and online marketplaces such as Myntra and Nykaa Fashion. We then took a B2B approach by tying up with pharmacies and online grocery store Big Basket.
Since our offline business was the most impacted, we introduced a home shopping solution for our store customers, giving them the option to try and buy clothes in the comfort of their homes, or book an exclusive time slot to visit our stores. These new retail streams have helped us tide over this tough phase.
FNW: HSE has managed to raise funds amid the Covid-19 crisis, the company had plans to expand its offline presence and was mostly utilising funds towards the same. Has Covid-19 changed that, will we see any expansion at all, and what is the growth strategy?
Shivani Poddar: Offline retail, which pre-Covid-19 contributed 60-65% to our business, is now down by 80%. On the other hand, sales from our online channels have picked up by almost 80% from when the lockdown was imposed. As online shopping accelerates in this post-C era, we too are focussing our energies in the same direction. While we have opened a few stores that were in the offing when the lockdown began, our offline growth plan has hit pause at the moment.
The new capital raised will be utilized for expanding our D2C footprint with new initiatives such as a subscription-based shopping experience, and catalogue curation with AI-based recommendations based on customers’ affinity and data mining. We are also venturing into new categories that are pertinent to the current situation such as loungewear, and formal keyboard-up dressing options.
Our brand Indya has seen massive online growth internationally during the last fiscal year, which will be harnessed further by adding localized offers, currencies, and payment methods.
Technology has been the backbone of our company these past 8 years and will continue to be strengthened to deliver a stellar customer experience, across channels.
FNW: The move to boycott Chinese and foreign goods has been gaining momentum after Prime Minister Narendra Modi’s call to go 'vocal for local’ last month. Do you see that as a positive for HSE, as foreign fashion brands have been dominating the market for a long time? What's your take on the same?
Tanvi Malik: Homegrown companies in every field need consumer support to engender a virtuous cycle of creating and servicing demand, thus creating wealth for both the economy and individuals. During this time, supporting local brands will mean creating more employment opportunities, thereby increasing liquidity and preventing a deep recession.
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