Inflation unusually high in India: US Polo chief

It looks like a simple T-shirt from the outside. But it takes 19,000 stitches just to embroider the logo of two horsemen wielding polo mallets on the breast pocket. The classic US Polo Assn (USPA) logo not only captures the spirit of a polo match in action, but the detailing to the last stitch. The brand rode into India by entering into a licensing agreement with Arvind Mills in 2009. Today, the classic American lifestyle brand is one of the fastest growing licensed brands in the Arvind stable, galloping to the Rs 70-crore mark this year. David Cummings, president and CEO of USPA Properties and Suresh J , MD of Arvind Brands & Retail, spoke to Shilpa Phadnis about how the growing middle-class of India is driving sales for the lifestyle sportswear brand. Excerpts:


How does India compare with China for US Polo?

Cummings: India is a new market for us. It's growing rapidly. We see a tremendous potential for India as we do from China. The economy is vibrant. You have an evolving middle-class market willing to invest in better clothing. As disposable income has increased, we believe the US Polo brand is ideal for this new expanding class. In the last 5 years, our brand globally grew 15-20% every year. Our expansion in India is extremely aggressive. We have 20 US Polo stores and 120 point-of-sales (PoS). We are looking at 50 exclusive stores and 200 PoS by 2012.

Suresh: The growth of the brand in India has been impressive. We are looking at revenue of Rs 150 crore from US Polo in the third year of operations (2012). We have launched footwear. We have introduced formal wear including blazers and suits for men. We will launch womenswear and kidswear in September, as also US Polo luggage. All this we expect will take us to the Rs 500 crore mark in the next 5 years. I think our visual and retail merchandise is one of the factors driving footfalls.

Spending is back. But is inflation posing a big challenge?

Cummings: Yes, it is. Worldwide, we see consumers especially in the US, freer with money. People in Europe and Asia have started opening their wallets since the fourth-quarter of last year. But India has experienced inflation that's unusual to other regions in the world.

Suresh: Unprecedented increase in cotton prices is a big worry for us. Cotton was Rs 28,000 per candy (356 kg) some time back. It has shot up to Rs 63,000 per candy. People are talking about these prices touching Rs 1 lakh in the future. We are paying Rs 250 for a metre of denim fabric. Any increase in cotton price will push up the cost of the end product. Last year was good in terms of sales. We are expecting some period of uncertainty due to inflation. We have to wait and see how the new pricing will impact consumer demand. We have already increased the price of all our brands by 8-10% in February.


You are trying to promote polo in a cricket-crazy country. What innovations have you planned around the merchandise?

Cummings: We are incorporating different elements of the sport through the brand. For instance, No. 3 represents the best player in the polo team. We have merchandise that represents this. We also support licensees with design and direction and leave the expansion to them.


We increased the price of all our brands by 8-10% in February.