India : Sara Lee Set To Enter Indian Apparel Market

The ready-to-wear market has attracted yet another multinational. The $20-billion, Chicago-based Sara Lee Corporation is set to stage an entry in the domestic apparel market. Industry sources told Business Line that the company was fine-tuning its strategy to bring to India, some of its global brands such as Playtex and Hanes in the inner wear and casual wear segments, and Champion in the sports wear segment.

While Sara Lee has had a presence in the domestic market through joint ventures for its consumer and household products categories, for its apparel venture the company is likely to enter as a wholly-owned subsidiary or through a strategic alliance with domestic players, sources said. The company is also exploring acquisitions and is likely to outsource production initially, they added.

According to sources, Sara Lee has identified India, along with China, as a key market for future growth for its apparel business. As of now, nearly 40 per cent of Sara Lee's sales and over 45 per cent of the company's profits come from markets other than the US.

Worldwide, apparel accounts for a significant chunk of Sara Lee's business. For example, Hanes, which Sara Lee acquired in 1979, is now the company's largest brand with annual sales of over $2.2 billion. The other significant brands in Sara Lee's global apparel portfolio include Bali, Wonderbra, Lovable and Justmysize - all of which are intimate apparel brands.

Worldwide, Sara Lee has three key businesses -- food and beverages, apparel and lingerie, and household products.

In India, Sara Lee's home-care brands are manufactured and marketed through joint venture company Godrej Sara Lee India. The company's significant brands in this category are domestic insecticides GoodKnight and Hit. The joint venture company has also made a recent foray in the car freshener category with its Ambi Pur brand. Sara Lee's shoe care brand, Kiwi, and hair-care brand Brylcream, were initially distributed through TTK Industries, which has now been converted into a wholly-owned subsidiary.

In the food segment, Sara Lee's acquisition of the biscuit division of Nutrine did not work for it, and the acquisition was subsequently divested.