KEY EXECUTIVES

Nikhil Chaturvedi , Managing Director

Salil Chaturvedi , Deputy Managing Director

Deep Gupta , Whole-time Director

Rakesh Rawat , Whole-time Director

• BSE: 532647 | NSE: PROVOGE | ISIN: INE968G01033

• Market Cap: [Rs.Cr.] 134 | Face Value: [Rs.] 1• Industry: Textiles - Products

PROVOGUE

• Provogue (India) Limited (PIL) was incorporated on 17th November 1997 as Acme Clothing Private Limited and commenced its operations as a manufacture and retailer of apparel for men under the brand Provogue.

• The Company's philosophy of `creating trends' in fashion, an aggressive marketing strategy, coupled with high profile promotional events and its distribution strategy of retailing through selective stores and malls has resulted in Provogue being now positioned as a leading fashion brand in India.

• The Company had launched the fashion brand Provogue' in March of the year 1998.

• The beginning of 1998 saw Provogue being launched in a Multi Brand Outlet, i.e. The Bombay Stores, Mumbai and progressing to 120 Multi Brand Outlets by the end of 1999. The first exclusive `Provogue' store was opened in Lokhandwala Complex, Andheri, Mumbai in the year 2000

• . Promart, a division of Provogue launched its first store in Ahmedabad in May of the year 2007.

• 1997 * Acme Clothing Private Limited was incorporated on November 11, 1997

1998 * The Company launched its brand "Provogue"

1999 * John Abraham was projected as the brand ambassador for Provogue.

* The Company introduced the brand "Provogue" in National Chain Stores like Piramyd, Shopper's Stop and Lifestyle

2000 * The Company opened the first "Provogue Studio" (an exclusive brand outlet) in Lokhandwala, Andheri, Mumbai

2001 * The Company opened its second Studio Store in Chandigarh

* The Company signed bollywood actor Fardeen Khan as the Brand Ambassador

• 2002 * The Company set up its factory at Daman to manufacture apparel.

2003 * The Company introduced the concept of "Provogue Lounge" at High Street Phoenix, Mumbai

2004 * The Company acquired Acme Global which enabled it to enter into fabric processing business

* The Company entered into a License Agreement with M/s. Rajni Frames for the manufacture and sale of eye wear products under its brand name

* The Company acquired 15,906 shares of Acme Hotels & Hospitality Private Limited ("AHHPL") pursuant to which AHHPL became its subsidiary

2005 * The Company changed its name to Provogue (India) Limited

• 2000 IFA: Winner `Most Admired Product Launch' - Provogue

• 2000 IFA Hall of Fame: `Most Admired Apparel Company in India' - Acme Clothing

• 2001 IFA: Hall of Fame `Most Popular Fashion Campaign of The Year' - Provogue

• 2001 IFA Hall of Fame `Most Admired Apparel Company in India' - Acme Clothing

• 2001 IFA Hall of Fame: `Most Admired Brand Professional of The Year' - Nikhil Chaturvedi

• 2003 Lycra(R) IFA: Hall of Fame `Most Admired Fashion Campaign of The Year' - Provogue (for year 2002)

• 2003 Lycra(R) IFA Hall of Fame: `Most Admired Brand Professional of The Year' - Akhil Chaturvedi (for year 2002)

• 2003 Lycra(R) IFA: Winner `Most Admired Exclusive Brand Retail Chain Of The year' - Provogue (for year 2002)

• 2004 Lycra(R) IFA: Winner `Fashion Retail Concept Of The Year' - Provogue Lounge (for year 2003)

• 2004 Lycra(R) IFA: Hall of Fame `Most Admired Shirt Brand of The Year' - Provogue (for year 2003)

• 2004 Lycra(R) IFA: Hall of Fame `Most Recalled Fashion Campaign Of The Year' - Provogue (for year 2003)

• 2004 Lycra(R) IFA: Winner `Most Admired Exclusive Brand Retail Chain Of The year' - Provogue (for year 2003)

• 2004 IFA: Hall of Fame `Retailer Of The Year in Fashion' - Provogue (for year 2003-04)

• 2004 Golden Scale Award for the Menswear Brand in Apparel by CMAI 2004

• 2004 DFU's inside Fashion brand award for excellence in retail performance

2005

• -Lycra(R) IFA Winner: `Most Admired Fashion Forward Brand of the year' - Provogue

• -Master Brand Award for Menswear Apparel

• -Provogue (India) Ltd signs an exclusive Licensee Agreement with M&B Footwear Pvt Ltd

2006

• -Provogue India - WOS enters into MoU with Omaxe Construction, New Delhi

2008

• - The Company has splits its face value from Rs10/- to Rs2/-.2010

• - Provogue (India) Ltd has inducted Mr. Punit Goenka into the Board of the Company and he shall be an Independent Non Executive Director of the Company.

PRODUCTS

Key Business Models for Provogue

Manufacturing Stage Distribution Stage Branding Stage

Brand Owner may provide designs and / or raw materials

Outsourcing Manufacturing

Own Manufacturing

Brand Name

Sell to a brand owner or Purchase brand

Distribute through own stores

Distribute through multi brand outlets

Distribution StrategyDistribution

Channels

Owned Stores / Exclusive Brand

Outlet

Discount Stores

Exports Multi – Brand Outlets or Shopping Malls

Distributors

Retailers

Distributions Channels • Owned Stores / Exclusive Brand Outlets• Advantages–direct medium of selling apparel–high realization for the garment sold–end-user feedback and knowledge of their preferences

• Disadvantages• –requires greater advertising expenditure• –greater fixed costs

Distributions Channels • ‘Multi-Brands Outlets' or Shopping Malls

•Organization sells apparels to multi-brand outlets, which in turn sell them through large retail space

•MBO’s are located in prime locations of the various cities and towns ensuring maximum reach

•MBO’s are chain of shopping malls having a presence in more than one location

•Realization from this channel is lower than those earned by selling to the retailers; as MBO’s keep higher margins because their costs are higher

Distributions Channels • Distributors•This channel involves two middle agencies between the seller and the end-

user •Organization sells it to the distributor, who in turn sells to the Retailers or

MBO’s•Realization from this channel are low

• Discount Stores •For selling apparels at lower prices to attract larger volumes•Used for selling apparels with minor defects or for selling slowmoving stocks•Low realization from this channel as garments are old-fashioned or sold at

low prices for gaining big volumes

Distributions Channels

• Retailers•Company sells garment to Traders or Commission Agents •Greater reach of the distribution channel•Creation of a middle agency between the organization and the end-user•Lower realizations from this channel

Distribution Channels Re

turn

s

Distribution Channels

Low Realizations,

but lower advertising and fixed

costs

Higher realizations than selling

through distributors

Advertising and fixed costs are

lower

High realizations

but advertising and fixed

costs are high LOW

MEDIUM

HIGH

Porters 5 Force Model

Porters 5 Force Model

• Bargaining power of customers Majority of the buyers are individual consumers With emergence of new brands consumers have vast range of garments India’s consumer profile is getting younger Economy of the country is improving so is the income level With increase in disposable income, the size of India’s middle class is also

improving. Co – existence of different players in the market tends to lower customer

switching costs.

Cont…

• Bargaining power of Suppliers Key suppliers are apparel manufactures, wholesalers and raw material

suppliers Suppliers are mostly small to medium sized enterprises With option to choose number of retailers rise in raw material and

inventory costs are also a threat. Since the cost of human labour is low, the supplier of man power have

strong supplier power The overall supplier power is moderately high in this sector

Cont…

• Threat of new entrants Industry is attracting national and international players to step up in the

arena. There are diverse product lines, so product differentiation provided by

new entrant is high Entry into industry requires low capital outlay so it is a growing stage

which in turn eases up setting up individual retail stores. Low switching cost of the customers implies they can anytime easily

switch from existing to new entry So entrance of new player in the market is high

Cont…

• Threat of substitute products Purchases can be from manufactures, custom made garments and online

sales. The option of tailor made is cheap but due to many options available,

customers prefer retailers to fulfill their shopping needs. Thus overall threat from substitute is low.

Cont..

• Competitive rivalry within industry The industry is quite fragmented The low fixed costs, operational and maintenance costs make it easier for

new player to enter into the market thus intensifying rivalry Due to changing trends in style and fashion, it is highly diverse with

respect to product assortment and product width Major player tries to attain customers by competing on price, quality,

product width and depth, designs, store ambience etc. All these factors make overall rivalry high

BSE Graph

NSE Graph

SWOT AnalysisSTRENGTHS•Increasing disposable incomes of the people•Brand conscious customers•Availability of cheap finance•Growing domestic market, increase in number of malls

OPPORTUNITIES•Increasing demand for luxury brands from the middle class •Research and new product development can help the companies to move across the value chain

WEAKNESSES•Predominance of unorganized sector•Technological obsolescence in the supply chain

THREATS•Increased competition in the domestic markets•Cheaper imports •Changing Government’s policy on FDI