Tech is the Best Way

HRX Celebrity Brand: A pretty face and then some

Last week, actor Tiger Shroff launched his clothing line “Prowl” in partnership with Mojostar, a celebrity-driven house of brands. This is the first company (formed as a joint venture between celeb management firm Kwan Entertainment and merchandising firm Dream Theatre) whose sole purpose for existing is to create new celeb-brands. It has also launched “Just F” with actor Jacqueline Fernandez.

Since 2016, many actors and some cricketers have launched brands to latch onto a segment that, so far, has remained largely untapped. In fact, celeb-led brands, in the overall Rs 4,000 crore ($556 million) licensing and merchandising market, are so nascent that analysts, executives, and consultancies don’t know the estimated size of the market.

But celebrities seem convinced that there is money to be made, just like actor Hrithik Roshan has through his brand HRX. Launched in 2014, activewear and fitness brand HRX is a joint venture (70:30) between Roshan and his talent management agency Exceed Entertainment. The company has gotten some things right in the past four years. It managed to get e-commerce platform Myntra on board, first as a licensee, and later, as a majority investor (51%). In the year ended March 2018, HRX crossed a turnover of Rs 140 crore ($19.5 million) in apparel, says Afsar Zaidi, founder and managing director at Exceed Entertainment. He adds that his brand is profitable and projects a doubling of turnover next year. That’s just from the apparel business. HRX also launched workouts and healthy meals in 2017 in partnership with Cure.fit, a Bangalore-based health startup run by Mukesh Bansal, Roshan’s longtime collaborator.

Buoyed by the success of HRX, Zaidi is now planning another apparel brand with a top Bollywood actor, the details of which Exceed didn’t share with The Mobdro.Buzz.



And not just Zaidi. The apparent success of HRX, marked by a strong investor, a popular name and decent turnover, is what most celebs and companies entering this space want to ape. “To be fair, HRX has been a pioneer,” says Jiggy George, managing director and founding partner at Mojostar and founder at Dream Theatre. “It started off much earlier. Though it was harder in the beginning, HRX has got it right now, with a strong investor.”


But celebrity licensing is not an easy task. It is difficult to create brands that are extensions of a celeb’s appeal for many reasons. The history of advertising and marketing is littered with examples of products suffering from tricky celebrity associations (and vice-versa). There is also the tall task of making money. Celebrity brands have limited appeal compared to mainstream ones; they usually only strike a chord with the people who relate to celebrities. With no dearth of competition in the categories like clothing or footwear, such brands have their work cut out to succeed.

HRX: A pretty face and then some


HRX was conceptualised in 2013 when Zaidi decided to extend the brand “Hrithik” to something bigger, as a part of the celebrity management exercise. The idea was to build something around an artiste.

“They wanted to create a property that can be extended to many spheres—apparel, gym equipment, smart devices, deodorants and innerwear,” says Gautam Kotamraju, the then chief creative officer and head of private brands at Myntra and now, business head at Cure.Fit. “But they didn’t have a product, a design or a retail footprint, which is when Myntra and Exceed met.”

HRX approached Myntra because it wanted to sell only online. It had its reasons, the most important being the low investment needed and a larger reach. No marks for guessing that selling offline in retail stores is a more expensive affair. An area in a multi-brand store like Shoppers Stop or Central costs about 35-40% of the maximum retail price of the products (given a minimum guarantee), plus the brand needs to hire its own sales staff, according to an industry executive, who didn’t want to be named. For a brand like HRX that had no prior experience of retail or clothing, online was a safer option.

Next was the task of identifying a gap in the retail market, somewhere at the intersection in the Venn diagram of Myntra and Roshan’s persona. Both parties settled on fitness clothing that allowed the consumers to move freely. “At the time, Myntra was selling casual and formal but nothing sports casual or athletic. For Hrithik, the category made sense because it matched his persona,” says Kotamraju. The space was dominated by global brands Adidas, Nike and Puma. HRX wasn’t supposed to be just gym wear; rather, it was gym-to-street-to-work-to-bar wear, also known as athleisure, perfect for everyday use. Additionally, the brand planned to sell casual wear as well but a primary focus was athleisure.

And boy, did the segment do wonders for HRX.

HRX was a brand purely modelled on a celebrity. Of course, Being Human was around but it was a part of a larger charitable initiative

GAUTAM KOTAMRAJU, FORMERLY OF MYNTRA

At present, activewear, pegged at Rs 5,000 crore ($695.1 million), is the fastest-growing category at an annual rate of 13%, according to data from retail consulting firm Technopak. The apparel segment overall is growing at 11%. Over the past two years, brands like Monte Carlo, Indian Terrain, Numero Uno, Van Heusen and US Polo Association (you name it, they’ve done it) have launched activewear collections as sub-brands. HRX, too, rode the wave, and it continues to. “The last two years have actually done pretty well for HRX,” says Zaidi. The Mobdro.Buzz could not independently confirm the revenue of HRX as the financials of the brand are a part of Myntra’s books, which is the licensee and now, and a majority investor in the brand.

At first, Myntra came on board as the manufacturer and sole retailer of HRX. It was purely a licensing deal. “And back then, Myntra wasn’t a Flipkart-owned company. We believed in the brand and went ahead with the launch. It was also about seeing how big is this really going to become,” says Kotamraju.

After Myntra got acquired by Flipkart in 2014, it continued to observe HRX’s success. Finally, in 2016, it acquired a 51% stake in the brand. “The move was self-explanatory. Something was working really well and we wanted to invest and officially own it,” Kotamraju adds. Roshan owns 70% of the remaining stake, and Exceed Entertainment, the rest. Between partnering with HRX as a licensee and owning the brand, Myntra also conceived another celeb-brand All About You with actor Deepika Padukone. Unlike HRX, All About You is a women’s western wear brand launched in a category which already had multiple global brands operating in it.



HRX had acquired two things that worked well for the brand: a strong investor and an emerging category it was operating in.

Fashion and fitness

The Myntra-HRX story is about fashion. Well, mostly.

There is another story in HRX, of fitness. When Bansal (then co-founder of Myntra) quit Flipkart and started his new venture, Cure.fit in 2016, Roshan and his team immediately recognised the synergies, says Bansal. “He [Roshan] is very deep into fitness. So, when we started Cure.fit, it was a no-brainer we had to partner with him,” he adds. In this collaboration, Cure.fit that has 70 gyms across India, offers HRX-branded meal packs and workouts apparently designed by Roshan.

What started as a small engagement led to a Rs 100 crore ($13.9 million) endorsement deal in August 2017 that includes an equity stake in Cure.fit as well as royalties. Apart from that, HRX also tied up with electronics maker Xiaomi to launch an exclusive edition of the latter’s fitness band.

Both the deals mark the expansion of HRX beyond apparel. There is more to come. This year, a line of innerwear. “After ‘Being Human’, [Salman Khan’s brand launched in 2012], HRX has emerged as quite a powerful brand,” says Arvind Singhal, chairman at retail consulting firm Technopak Advisors.

Drawing inspiration from HRX, many brands have been launched in a fashion similar to that of HRX. “But mostly, these brands have seen limited success,” adds Singhal.

Go all out or go home


A number of brands have come up since 2016. Count ’em: Actor Shahid Kapoor’s activewear brand “Skult” in 2016; Anushka Sharma and Sonam Kapoor’s women’s brands “Nush” and “Rheson”, respectively; cricketers Yuvraj Singh’s “YWC”, Virat Kohli’s “One8” and Mahendra Singh Dhoni’s “Seven”, all in the sports or athleisure space, and Sachin Tendulkar’s “True Blue” in menswear.

All these brands have been launched in collaboration with retailers or manufacturers. For the latter, it’s a chance to leverage the popularity of the celeb to sell more; for the celebs, it’s an opportunity to remain relevant and make some money.

But these brands have it tough because although the athleisure category is growing, the market is already crowded with traditional retailers eyeing a share of the pie. HRX was the first celebrity brand in the athleisure space, launched on the cusp of the global athleisure boom in 2014. It was forward-leaning, occupied a niche and got people’s attention with clothes designed by a retail powerhouse. It got the first mover advantage. Other brands launched at the same time—Kohli’s “Wrogn” and Salman Khan’s “Being Human”—also excelled with their unique selling points. Being Human supported education and healthcare; Wrogn, with Universal Sportsbiz Private Limited, promoted the questioning of the status quo.

Our approach is a little different. We are not looking to build brands for celebs; we are just looking to build good brands

JIGGY GEORGE OF MOJOSTAR AND DREAM THEATRE

Mojostar, whose sole business is setting up new celeb-brands, is looking for unoccupied spaces like cosmetics or fitness, says Anirban Blah, managing partner at Mojostar and founder of Kwan Entertainment. In 2018, it launched two fitness brands—”Just F” with Jacqueline Fernandez and “Prowl” with Tiger Shroff—and is planning a third. Unlike HRX, which turned to Myntra for its manufacturing and retail prowess, Mojostar plans to do it all—the investment, product development, design, manufacturing and marketing.

Whether Kwan and its collaborator, Dream Theatre, a licensing agency, can match the success and fashion know-how of a dedicated retail giant like Myntra remains to be seen. It may be challenging given that Mojostar has just a handful of employees. Myntra has thousands. Moreover, back in 2014, HRX was it for both Myntra and Zaidi; they did not have any other celebrity brands to work on. “We weren’t just skin deep but really knee-deep in the brand,” says Kotamraju, formerly of Myntra.

I have seen many licensed properties and I have seen many celeb-brands launch but I don’t think any team has worked like we did

GAUTAM KOTAMRAJU, FORMERLY OF MYNTRA

All HRX collaborators from Myntra to Cure.fit stress that the brand’s success is in part due to Zaidi’s and, even more, Roshan’s absolute commitment to the brand. When HRX launched, Roshan and his management team gave up endorsing competing apparel brands. For instance, Roshan endorsed formal apparel for J Hampstead but not casual wear. More recently, he has given up innerwear brand Macroman as HRX is planning an innerwear line. Endorsements that did not align with HRX’s message of fitness and breaking limits are ignored.

“There was no access problem with Hrithik,” Kotamraju says. “He was a call/ text away. No calendars and no managers were involved.”

Other celebrities may not be as dedicated to their brands. Kohli, for example, is seemingly everywhere these days, hawking everything from Manyavar (ethnic wear) to Volini (an anaesthetic spray by Sun Pharma). Shroff continues to endorse the menswear brand Forca. While this may earn the celebs crores of rupees—Kohli apparently made Rs 143 crore or $20 million from brand endorsements in 2018, according to Forbes Magazine—it may not ensure the long-term future of their brands once they are on the way out.

It is for that day brands need to plan. After all, all celeb brands, including HRX, are competing in a space where there are global giants, from Adidas to Puma to H&M, each making a revenue of more than Rs 700 crore ($97.3 million). If the ultimate goal is to compete with them, the brand has to outlive its origins. If the goal is smaller, just to appeal to selective audiences who associate with the celebrity, then they can stay the course.

“In a larger sense, celeb-led brands have a lesser appeal than the mainstream brands; these cater to a small set of consumers that can relate to the celeb,” says Singhal. “It would be surprising if any of the celebrity-owned brands could grow big enough to compete with the pure, retail ones,” he adds.

Zaidi and Roshan know this and plans are afoot to transcend the actor. In 2015, HRX hired Tiger Shroff—because he carries an image similar to Roshan’s—as its brand ambassador in 2015, which Singhal of Technopak believes is an important move in making a brand self-sufficient. Shroff was associated with HRX for 18 months before he went on to launching Prowl with Mojostar. HRX also sponsors sporting events, at times without Roshan’s participation. “We sponsored Indian women’s rugby team and Paralympics, without Hrithik,” says Zaidi.

Globally, the few celebrity-driven brands that have become mainstream are the ones that have gone beyond the celeb. Did you know Lacoste was founded by tennis player Rene Lacoste, also known as “the Crocodile”? Wimbledon champion Fred Perry founded “Fred Perry”. Actor Jessica Alba started The Honest Company, a natural food and beauty goods brand. But many other celebrity associations remain restricted to endorsements, limited edition product lines or niche markets.

Will India be any different? It’s too early to tell and there are so many celebrities rushing in that it will be a while before the water finds its level. And when it does, it will take a lot of effort to separate the celebrity from the brand and give it a longer lease on life.
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