India's first homegrown winter wear brand, 'Monte Carlo' now clocks in Rs 580 Cr turnover
If you live in North or East India, you probably own a Monte Carlo jacket, sweater, or cardigan. If not, you would have seen its outlets or winter wear products when you were out shopping. Its winter wear products are sold at thousands of stores in states such as Punjab, Uttar Pradesh, Bihar, Haryana, and more.
But did you know that Monte Carlo was India’s first organised fashion apparel brand?
Its legacy and ancestry, which traces back to post-Independent India, is not known to many. Its incredible story started from Ludhiana, Punjab, a city which boasts of a vibrant textile industry.
Monte Carlo’s history in Ludhiana started with Oswal Woolen Mills, which was set up post-Independence in 1949. The mill started bringing the wool industry stakeholders together to form a more organised approach of manufacturing and selling. It eventually became one of the largest producers of woolen yarns in India.
In 1984, Monte Carlo was launched as a brand under Oswal Woolen Mills, and held the prestigious title of being one of the first organised fashion apparel brands in India.
“We were already in the business of woolen yarns and were also manufacturing products for various industries. It was then that we understood the need and demand for making the industry organised, and gave India its very first readymade apparel brand,” says Rishabh Oswal, Executive Director, Monte Carlo.
Rishabh Oswal, Executive Director, Monte Carlo
In just one year, the brand recorded a Rs 2.5 crore turnover. In 2002, several years after Monte Carlo was launched, it slowly became the all-season brand that we all know. “The launch was a significant step in the evolution of the branded garment industry in India. Since then, we have been catering to the ever-expanding demands of the clothing and fashion industry,” Rishabh adds.
Growing from strength to strength over the years, the business brought in Rishabh Oswal in 2015 to manage the brand. Currently just 27 years old, Rishabh is a third generation Oswal entrepreneur, and has launched his own sportswear brand named ‘Rock It’.
Last year, Monte Carlo recorded a turnover of Rs 580 and registered a revenue growth of around 11 percent, compared to the previous year, company information said. Its net profit for the period also rose sharply by about 35 percent, touching around Rs 59 crore.
Monte Carlo has also been clothing partner for the blockbuster Bollywood films Barfi, Mary Kom, Bhaag Milka Bhaag, and Student of the Year.
It now thrives on its strong retail presence, with over 2,500 multi-brand outlets, 600 large format stores, including Reliance Trends, Pantaloons, Central, Shoppers Stop, Lifestyle, and more. Being a premium brand, Monte Carlo and its winter wear enjoy a strong pricing power. It also a no discount sharing feature with its multi-brand outlets. Most of its revenue comes from North India, while some comes from the eastern regions.
In the past, the company has said that it primarily sells on pre-orders and on an outright basis. By virtue of this business model, there is no major inventory risk and Monte Carlo remains adequately insulated from the normal hazard sales in the branded apparel business, it said.
The brand has also entered into distribution agreements with online sales platforms Myntra, Jabong, Amazon, Flipkart, and Paytm to leverage digital commerce. “With the online retail segment witnessing a rapid pace of growth, we have established an e-commerce presence through own portal, montecarlo.in,” says Rishabh.
It is also one of the few fashion wear brands listed on both the Bombay Stock Exchange and the National Stock Exchange. Monte Carlo also sources several winter wear products from a wide number of MSMEs, both domestic and international suppliers.
Monte Carlo has leveraged the strength of Oswal Mills to reach some important milestones in its winter wear business. It has gained the ISO 9001: 2000 certifications and won the Best Exhibited Product awarded by the International Wool Secretariat. “We have also emerged as the number one brand in the men's wear category in a 2009 survey by Images-ORG-MARG. Then in 2014, Monte Carlo was honored as one of Asia’s best marketing brands by World Consulting and Research Corporation,” Rishabh says.
Oswal Woolen Mills plants can produce up to 6,000 woolen garments per day
Being just 27 and in sync with the current trends of the youth, Rishabh says his business mantra for this kind of success is to constantly innovate even in niche categories.
He says, “This focus towards a niche category of value-for-money as well as up-to-date winter wear products has enabled Monte Carlo to cement its reputation in the apparel industry. Being the first, entrant Monte Carlo and its winter wear enjoys great legacy and loyalty from the customers.”
It also has an in-house R&D division to create new winter wear product designs and identification of appropriate fabrics, he adds.
To keep the large enterprise running, Rishabh says its shareholding patterns are transparent and available at its corporate website. It follows the usual channels of business, i.e, transactions on the BSE and the NSE, he adds.
“After the demerger from Oswal Woolen Mills, Monte Carlo collaborated with Samara Capital to raise funds and came up with an Initial public offering in December 2014 to make the business more robust and systematic,” he explains.
Challenges of managing growth
Managing growth is never easy, and Monte Carlo has ensured it has adequate internal financial control systems and procedures which commensurate with the size of the company. “The internal auditors regularly monitor and evaluate the efficiency and adequacy of internal control systems in the company, its compliance with operating systems, accounting procedures, and also ensures that the internal control systems are properly followed by all concerned departments,” Rishabh says.
Rishabh wants to always stay in touch with market sentiments.
“We want to keep adding products and sub-brands to our kitty. For instance, we launched a fitness brand when we saw the demand. After GST, there was a need for a cheaper brand. We then quickly launched our ‘Cloak & Decker’ series,” he says.
Monte Carlo's winter wear range starts from Rs 1,000 and goes up to Rs 10,000
Monte Carlo’s focus is now on boosting brand visibility and expanding its distribution network. “The opportunity is certainly large as the domestic market for apparel and lifestyle products, currently estimated at $85 billion, is expected to reach $160 billion by 2025,” Rishabh says. To tap into this evolving market, Rishabh aims to use a mix of all the five elements of market differentiation, i.e, product, channel, image, service and personnel differentiation.
But there is increased competition among organised players in the Indian winter wear market. Rishabh believes that the competition is only going to intensify. One of his major concerns is the trend of heavy discounting, where retail and online channels are forced to offer heavy discounts in order to meet sales targets.
He adds, “It is also difficult to keep up with all the different strands of interest among cloth consumers, and fashion is highly seasonal as well.” This is clearly evident from Monte Carlo’s revenues. Usually, around 55-60 percent of its revenue comes in Q3, which comprise the colder months of October, November, December. During this season, winter wear products such as sweaters, jackets, cardigans are sold in large numbers.
To reduce the impact of seasonality on revenues, Monte Carlo is expanding its presence in western and southern markets as well as expanding its product offerings in the home furnishing and kids segments. Monte Carlo could soon become a household name in states like Karnataka, Tamil Nadu, Maharashtra and more.