India Pakistan Apparel Retailing Operations Roadmap

Strategy Roadmap for Orange

Overview

This paper discusses the operational issues of a possible apparel retailing chain that operates in India and Pakistan and is looking to expand beyond.

Operations

Orange had a very successful Eid season in Bombay, but less so in Pakistan. There are several issues on our plate that need to be addressed:

• Open the restaurant and hair salon in Defence Z-block. These are important since they will generate revenue, buzz and traffic for the Z-block shop. One or both of these could be very successful and possibly be more profitable on a square-foot basis than the retail shops. However, they will both require substantial capital injections.

• Improve our marketing efforts in Pakistan to raise awareness of the Orange brand in Pakistan. Many potential buyers are simply unaware of the existence, location and content of our stores.

• Improve our merchandising efforts in Pakistan, in the light of lessons learned in Karachi and Lahore. We need to fix problems with wrong sizes, inadequate variety and too-slow turnover of garments on the shelf. Better interaction with Bombay manufacturing is very important.

• Work on our operational processes which are very basic right now. The IT systems are not connected, there is no stock-count or inventory control process, nationwide financial reporting is not in place

• Reconfigure and train the sales force. In Karachi the sales force need to be replaced. In all Pakistan stores, the sales force needs to be trained and have specific assignments. A process for tagging and stock-take needs to be implemented.

• Improve planning with Design and Production. We need to create a 12-month outline plan which shows a schedule of which garments will be produced, shipped and displayed on which dates. We also need to schedule our annual sales.

Outlook

The Bombay stores have gained a lot of traction in 2007. Based on a size of 2000 sq ft. for Red Village and 1000 sq. ft for Beachview, sales rose as follows:

Store Jan 2007 Sales per sq. ft. /day Aug 2007 Sales per sq. ft. /day

Red Village 13 25

Beachview 7 42

Karachi 5 6

Clearly, Orange has struck a chord with