LEVIS STRAUSS INDIA LIMITED [LSIL]

About the Company:

LSIL was established in 1994 under the parent American apparel company, Levis Strauss & Co.

LSIL is the most prominent jeanswear company in India with about 270 flagship stores, 500 other points of sale, across more than 200 towns across the country.

LSIL provides the parent company with about 8.8% of the total sales.

Levi’s was considered as the “most admired jeanswear brand of the year” for 6 years in a row.

Retail Store Location Strategy:

Store location is one of the prime considerations in a customer store choice. Location decisions have long term strategic importance. Location decisions are hard to change as they involve a huge involvement. LSIL has truly understood these issues and strategically located its stores at the best places.

The factors that LSIL has considered for deciding the location are given below:

1) Demographics – Lifestyle, income potential, occupation mix, nearby offices.2) Traffic & Access – Number & types of vehicles, access to store, street congestion, mass

transit presence.3) Competition – Number & types of stores in the area, key player analysis, location of

competitor.4) Site factors – Size of site, Parking space, visibility of store, entry & exit, building

condition, retailers association.5) Cost factors – Terms of lease or rent, rent rates, operation cost, local taxes, membership

cost of association of retailers.

LEVI’S stores in DELHI/NCR (stores visited):

1. Noida, Sector – 18: Vintage retail and merchandising, G61-62, Opposite McDonalds (Franchise/MBO)

2. Noida, Sector -18: Millenium (Flagship Store)

3. Noida, Sector – 18: TGIP (Flagship Store)4. New Delhi, Connaught Place – F-19, Inner circle. (Flagship Store)5. New Delhi, Katwaria Sarai (Franchise)

LSIL fashion merchandise stores can be categorized into the following formats according to the location:

1) Exclusive brand outlets / Flagship stores (EBOs) – EBO is a distribution strategy where the retailer sells its products in one retail outlet in a specific geographical area. An EBO is suitable in a shopping centre/central business district which is the main centre of commerce and trade in the city. Usually every Metro city has more than one central business district. It is better to have EBOs in each of these places as it gives a significant brand presence due to high customer traffic movement and also footfalls will increase and convert suspect customers into prospective clients.

2) Multi brand outlets (MBOs) – MBOs are retail stores not owned by the retailer but a channel partner of the retailer who has made agreements with various retailers to sell their brands in their outlets. This type of brand outlets is suitable in a secondary business district which has shopping area that is smaller than the central business district and revolves around at least one variety store at a major street location. These MBOs are available in plenty in Metro cities and Tier 2 & 3 cities. Customers in these areas are not specifically brand conscious but more of value buyers and they prefer to shop in stores which house a variety of brands.

3) Franchise – Franchising is an innovative method of distributing goods and services where the franchisor (retailer) provides products and assigns to franchisees the right to market and distribute the franchisor’s goods and services. The business format franchisee model is the most popular method in apparel franchising. The franchise model of store operations is best suited when the retailer wants to enter new geographical area where limited knowledge is available to conditions of business and market potential is not very clear. Also having own stores in new locations attracts lot of investment and riskier. It is better to enter new geographical areas through franchise model and with its success the retailer can plan to expand his own market through opening of EBOs and Flagship stores.

Store Mapping of LEVI’S Fashion Merchandise Retail Outlets:

Thus LSIL has taken care in devising a well framed location strategy for its retail outlets so as to enhance its visibility and attract prospective and also persuade them to become brand owners.

Primary Trading Area - 50-80% customers; Central Business Districts - metros - EBOs

Secondary Trading Area - 15-25% customers; Secondary Business Districts - Metro, Tier 2 & 3 cities - MBOs

Fringe Trading Area - 10% customers; Stores in new area- Expansion mode - Franchise