"Today, it is not the number of outlets but the total retail area that is relevant", CEO Breakout Pakistan

Breakout Pakistan is a renowned western wear brand operating in Pakistan since 2010. The brand offers quality casual western ready-to-wear clothings for men, women and kids. It is one of the fastest western wear retail brand of Pakistan.

Imran Ghani is a CEO and a founder of Breakout Pakistan. He began his career with Crossroads in 2002 as a business head. Later, he started his own high street clothing brand Breakout in 2010. Under his leadership, Breakout has expanded into kids and eastern wear as well.

Mr. Ghani holds an undergraduate degree in business administration from Indiana State University, USA. He also holds a Masters in Business Administration from Lahore University of Management Sciences. Mr. Ghani met the BR Research team over brunch for a very interesting conversation about the brand and the retail sector in general. Following are the edited excerpts

BR Research: What is you take on the retail sector of Pakistan?

Imran Ghani: The retail market for apparel has become very challenging and competitive. It has completely changed in the last five years, its a budding industry with a growth rate of over 20 percent. The structure is such that the market is now moving towards consolidation where the survival for smaller brands is becoming very difficult. The go-to formula of getting onto the bandwagon will work no more; today, you need a proper business plan, investment, and most of all, creative knowledge to succeed.

Also, the changes in the next five years will be much more dramatic; with the phenomenal growth in shopping malls, the landscape will reshape completely.

BRR: Tell us about your history with Breakout?

IG: I started my career with a brand named Crossroads in 2002 as a business head. Later in 2010, I decided to give my entrepreneurial skills a chance and started my own brand, Breakout. This was the time when we didnt have many western apparel brands in the country like we have today; Crossroads was at the top, and the market wasnt very dynamic, though it was changing. Competition was relatively less in the retail sector, and one could enter the market with limited resource unlike today.

So, I tapped that opportunity; I didnt want to compete with the giants and therefore developed a new niche. This strategy helped us grow very rapidly. As I said before, the investment required at that time was relatively less than what is required today. Hence, my partner and I were able to start with our savings. Total initial investment we made at that time was around one crore rupees.

BRR: This was your story about the Breakout brand? How did the kids version and your eastern offshoot come about?

IG: I would say market demand, market opportunity, desire to grow, observation and availability of resource and investment - all such factors contributed. Generally, market opportunity, financial and human resource availability are most important.

BRR: What is your target market?

IG: The brand projects New York style clothing. For Breakout, we decided to target youngsters as there was a serious dearth of choices for this growing segment of the population at affordable prices. How I differentiated the brand Breakout from the existing players? Our theme was to make the brand younger, louder and colourful something that was missing in the market where most retailers feared playing with colours and cuts. If you remember, the Breakout outlets became known for their colourful and trendiness. In short, our target market for Breakout is basically the younger generation. However, we are proud that many of our products are workable for older generation too, which gives us an additional edge. Especially our winter women line is very strong. Our kids and eastern wear as the name suggests are also known niches.

BRR: How many outlets does the brand have today? And how dispersed are you?

IG: We have over 70 retail outlets for Breakout, 40 for Kids Breakout, and 10-12 outlets for East Breakout, which makes one outlet per month on average since our first store launch. We are located in 10-12 cities across the country. We are concentrated mostly in Punjab and Islamabad. Thats because we started with limited resources, and we wanted quick growth and maximum return with minimum effort both financial and physical. This is why we have been slower in Karachi; we opened our first store in Quetta only six months ago. The more you go away from your home base, the greater the cost of efforts.

BRR: What is your organisational structure? Are you leading all three brands?

IG: I am more involved with Breakout - its day-to-day working - as it has been my brainchild. For Kids Breakout and East Breakout, I established the brands and handed them over to professionally appointed teams. Another reason for being closely involved with the main Breakout brand is that it is the key revenue generator that can affect other brands. Ultimately, Breakout too will have a team that will be managing the brand.

BRR: With a string of new malls in Lahore, do you see yourself grabbing a store in each of them? If yes, do you plan to close down any of the existing stores that probably come in the same area? ­

IG: Yes, we are there in Emporium, Lahore. We will be there in Packages Mall as well when it opens. Whether we close down a certain retail outlet or not depends on the response we get over some time. For example, whether to continue our DHA Lahore branches will be part of our business strategy put together after the shop in Packages Mall becomes operational.

Not going to a mall is not an option for us. All around the world, brands have flourished more than the informal sector with the emergence of the mall-concept. It is this time in Pakistan, and brands will see the real growth now. Shopping malls help brands achieve growth in much lesser time and cost; you need lesser number of outlets, which minimises managerial and other costs, and you might be generating larger revenues.

BRR: Any reason to join the online platform so late when all other brands have been quick in adopting online retail?

IG: There has been no particular reason for that. Following others has never been our strategy. We focus on whats right for us at that point in time. Online retail is a good market, but even today its a fraction of the total size of the market. Our growth has been phenomenal, and at the beginning of each year over the last 3-4 years, we had to push the idea of having an e-store down the priority ladder, because we were generating enough sales growth. It is just a few weeks that that we came online.

BRR: In terms of revenue, how much is being contributed by bigger cities?

IG: Lahore, Islamabad, Rawalpindi, Karachi, Faisalabad and Sialkot are our key markets that are contributing towards 70 percent of Breakouts total revenues, while the remaining 30 percent comes from smaller cities. When it comes to the number of branches, our 50 percent branches are in these bigger cities with large store areas.

BRR: What are your future plans?

IG: From this year, besides joining the online retail, we are now moving forward with bigger stores. If on average our existing stores are of 2000 square feet, we have two new stores of 7000 square feet each coming up. One is already launched in Islamabad its a new concept store Breakout BACKSTAGE at Giga Mall - WTC, Islamabad. The concept of the store has been developed by a Spanish retail design firm, and again is inspired by the youth; the music they love, the hobbies they take up and the free spirited adventures. The second is opening next month in Packages Mall Lahore.

BRR: Talking of large store areas, what is behind this concept?

IG: The key here is to look at the return. Today, it is no longer the number of retail outlets but the total retail per square feet that is relevant. Our back of the envelope calculations suggest that we will be adding more square feet in the next 1.5 years than what we have added in the last six years. While the space is increasing, the number of outlets will be less as we - and many other brands are moving forwards with bigger stores. The idea is to create a shopping experience. But I would like to add here that the increase in store space should be in line with the size of the product offering something that many players are not taking into consideration.

BRR: Do you see any export potential for Pakistani brands in the coming years? What about Breakout?

IG: We are not exporting, and we are not looking into this market right now. As for the potential for Pakistani Eastern Brands abroad, I feel that our brands can do very well in similar countries like India, Bangladesh, Sri Lanka and Far East with a little bit of customisation and tweaking of designs and cuts. For western wear, I feel that the market is extremely competitive and the costs outweigh the benefits right now.

Concluded