Interview with Jai Subramaniam

The VAT regime must be implemented rigorously and Indian Government’s losses must be plugged” andmark has lived up to its name. This pioneering Chennai-born book-destination is today a leading ‘family centric multi-product leisure store’. From its first store in 1987 (focused on selling books, magazines, greeting cards and stationery), which was a 5,500 sq. ft. space in Nungambakkam, Chennai, Landmark has grown today into a five-store chain with revenues of Rs 800 million. An online store, landmarkonthenet.com, adds to its increasing penetration across the country. And the chain has ambitious plans — which, in revenue terms means — becoming a Rs 2.5 billion chain within the next three years.

Its flagship store, located at Chennai’s Spencer’s Plaza and having a sprawling area of 37,000 sq. ft., was inaugurated in the year 2001. Its largest store is located in Bangalore at ‘The Forum’ in Koramangala, spread over 45,000 sq. ft. Books alone account for a whopping 13,000 sq. ft. of this space. In Kolkata, Landmark opened its first store in 1999 with a 5,500 sq. ft. selling area, at Emami Shoppers City, Lord Sinha Road. The store is a 50:50 JV between the promoters of Landmark and the Rs 3.50 billion Emami Group, and has tripled in size since then to 15,000 sq. ft.

The chain’s growth plans go beyond selling-spaces and revenues. Landmark is all set to enter more cities across the country soon. And with retail being ‘the’ segment many a foreign player is looking to enter into in India, one wouldn’t be surprised if some major developments in the space involve established players like Landmark. Landmark would be a target, perhaps, as it will be looked at as a proudly original and hardbound Indian classic. And the illustrious pages in the history of this book-lovers’ paradise promise to keep growing. Landmark is a brand to reckon with.

One of the promoters, Jai Subramaniam, who takes care of the financial and operational functions, spoke to Gokul Krishnamurthy. This Chartered Accountant, who ran a stock broking firm before plunging headlong into the retail universe, spoke about Landmark’s plans for the future and the chain’s learnings. Excerpts…

You are a ‘family centric multi-product leisure store’. Who is your primary target audience?

The core of our audience has been and will remain the EEMI or the English-speaking middle class Indian. This segment is growing at a rate of at least 8 to 9 per cent each year. We are talking about a base of 350 million people or so. We are extremely optimistic about this segment.

What are Landmark’s expansion plans?

We are looking at four more cities very aggressively. In this financial year, we are looking at two of these stores. In the subsequent couple of years, our plans are to expand by four stores each year in new cities as well as cities where we already have a presence.

How has the e-business performed so far?

It has been exciting but not moneymaking as yet. There simply aren’t enough Internet users. There is a lot of space that needs to be covered. The quality of hits has not risen to a point where people are habituated to making purchases online.

In a way it is good for all of us that there is still life beyond computers, at least all in the business of retailing. Different delivery modes will survive and computers will, at one stage, take over our lives. But the rate of change in adopting computers is not as much. Though the Internet business is growing, the growth is not at the same rate as our brick and mortar business.

E-business also gives you a micro picture of cities you plan to move into.

How is the brand ‘Landmark’ being communicated?

At the moment, our word-of-mouth (WOM) is very strong. We are continuously looking at different media options like radio, hoardings, events and co-branding options. But then, there is no point in doing co-branding for the sake of doing it. It should be a win-win situation for both.

Our stores are, I believe, dramatically innovative, customer friendly and offer some unique value and knowledge propositions. Each store also has its own identity and is full of different surprises. Which is one of the reasons our WOM is very strong.

How do you plan to grow from Rs 800 million to Rs 2.5 billion in three years?

We are expanding to more cities and we are expanding continuously. The growth will be organic and we might look at acquiring brands also. We are looking at opportunities.

Will the acquisitions be in the same space?

They may not necessarily be in the same space. In the past too, we have had acquisitions, but in the back end.

On the suppliers’ front, how much does the tag of a national chain help?

It makes a lot of difference. If you have a non-bureaucratic set up, you don’t miss out on opportunities. We speak to a lot of people across cities.

Another factor is that each store in our chain likes to be a local store. We want to build great boutique departmental stores with a sense of ownership with the customer. This identity needs to be total within the store. And obviously, the audience varies from city to city making each store customised for the city.

How would you compare the customer profile in the cities where you are present?

We are present in the heart of the real Silicon Valley of Bangalore, Koramangala. It has a lot of young people. It’s a different boomtown and the customers are very upbeat. The location is absolutely exciting and the profile comprises great people and a great culture. There is a lot of buzz in this market.

On the other hand, Chennai primarily comprises the educated middle class. The people coming in are more in families. The customer is more staid, more traditional, and there is a deep rooting in culture and a high level of loyalty.

Kolkata is a city that is highly conservative but wanting to burst out. There aren’t enough opportunities to burst out of the conservativeness. The Kolkata customer, we find, is a very careful customer. The purchase is highly cherished by the customer here.

In which store do you record maximum conversions on footfalls?

Our first store at Nungambakkam records the highest conversions. The whole atmosphere is filled with the excitement of selling a variety of goods at this destination store.

To read the entire story, grab your copy of Impact Advertising and Weekly magazine issue dated June 20-26, 2005