Apparel retailers are investing in expanding their offline and online presence.
Organised retailers like Shoppers Stop and Walmart have drawn up huge investment plans to expand their physical and online reach to maintain profitability. While Shoppers Stop is planning to invest Rs.140 crore for expansion of its stores and online sale infrastructure within next one year, Walmart is seriously looking at opening 50 stores over next five years.
Apparel retailers see growth in profit
Despite a delayed 2014 winter, sales in the third fiscal quarter ended December 31, 2014 at fashion apparel marketer Monte Carlo Fashions, surged 18.7 per cent from a year earlier quarter. Its revenues rose 18.7 per cent to Rs.3168.6 million from Rs.2668.7 million in the third quarter of fiscal 2013-14. The key reasons behind this strong revenue growth were the persuasive brand positioning and the robust distribution network the company has maintained. In the reporting quarter, EBIDTA without considering other income zoomed by 35.4 per cent to Rs.720.2 million as against Rs.531.8 million in the same quarter of previous fiscal year. EBIDTA margin drove up by 280 bps to 22.7 per cent from 19.9 per cent in the prior year quarter. According to the apparel marketer, EBITDA rose due to other expenses as a percentage falling from higher revenues, resulting into an operating leverage as well as better operating efficiencies. “With respect to understanding the impact of seasonality, it should be noted that a significant amount of revenue is generated primarily during the third quarter of each fiscal year. Winter clothing products are typically higher in value and accordingly generate higher revenue, in comparison with non-winter products,” the company said in a statement. Monte Carlo added 11 exclusive retail outlets with a combined area of 10,895 sq. ft. The company also recently started its e-commerce portal and has also established tie-ups with several other online portals. On the other hand, Textiles major Arvind Ltd reported 6.78 per cent increase in its consolidated net profit at Rs.109.1 crore for the third quarter ended December 2014. The company had posted a consolidated net profit of Rs.102.17 crore in the same period last fiscal, Arvind Ltd said in a filing to the BSE. Consolidated net sales during the period under review stood at Rs.2,069.29 crore as against Rs.1,768.52 crore in the same period last fiscal. Revenue from textiles segment during the quarter was at Rs.1,290.68 crore as compared to Rs.1,176.37 crore last fiscal. Commenting on the results, Arvind Ltd Director and Chief Financial Officer, Jayesh Shah, said the revenue growth was led by growth in brand, retail and textile businesses. “While we see strong global demand for textiles, Indian retail demand is not as expected. We expect revenue growth at 14-15 per cent for this financial year,” he said in a statement. Arvind Ltd shares were trading 3.39 per cent up at Rs.301.95 per scrip during afternoon session on the BSE.
Again, Shoppers Stop Ltd (SSL), India’s prominent retail group (operator of large format department stores, home stores, specialty stores like Crossword, Mothercare,M.A.C.,and hypermarkets) has reported a gross retail turnover of Rs.844.77 crore for the quarter ended December 31, 2014 as against Rs. 787.49 crore in the corresponding period last year. Net Profit for the quarter stood at Rs 13.77 crore. With 73 stores across 34 cities in India, Shoppers Stop continues to grow and expand its retail footprint. This quarter, SSL added one new Shoppers Stop store in Mangalore,one Bobbi Brown store in Delhi, One Mothercare SIS store in Vizag and two Crossword stores in Bengaluru and Kohima. Driving ahead its successful Loyalty programme, SSL continued to expand its membership base adding 1, 20,622 new members to the First Citizen Loyalty Programme in Q3FY15. The programme now has a total First Citizen base of over 36.35 lakh members. Speaking on the performance, Govind Shrikhande, Customer Care Associate and Managing Director, Shoppers Stop Ltd said, “Shoppers Stop Ltd
continues its growth trajectory by adding new stores across formats. The loyalty members have also grown to 3.6 million members who contribute considerably to the topline. We are formulating our omni-channel retailing approach over the next few months. We are confident that our omni-channel efforts will help us in countering the disruption created by online players.” However, Future Lifestyle Fashions reported a 98 per cent decline in its net profit at Rs 1.85 crore for the third quarter ended December 31, 2014. The company had posted a net profit of Rs. 93.39 crore in the same quarter last year on account of other income of Rs.139.77 crore. In the third quarter ended December 31, 2014, other income was at Rs.11.81 crore. Net sales of Future Lifestyle Fashions during the quarter under review stood at Rs.723.47 crore, up 9.84 per cent as against Rs 658.62 crore in the same period of the previous fiscal.Overall expenses during the quarter jumped to Rs.710.21 crore,up 11.59 per cent compared with Rs.636.42 crore in the corresponding period last year.
Retail brands are all set to expand their portfolio
Apparel brand Van Heusen plans to expand its exclusive brand outlet (EBO) count by 50 this year, which will take the store numbers to 300, a senior official of the company said. Vinay Bhopatkar, COO of Van Heusen said in a media report, “We will expand Van Heusen exclusive outlets by 50 to 300 this year and also close this fiscal year with 20 per cent growth from Rs.1,500 crore last fiscal. According to him, the brand generates only two per cent of total revenues from e-commerce as they do not give any additional discounts to etailers other than the standard discounts. However the company does not want to avoid online channels, as it has created brand awareness in smaller towns. But the expansion of their outlets will be mainly in tier II and III towns. Besides, in order to hike conversion rates of walk-ins at Van Heusen outlets, it has integrated online and offline aspects through its‘My Fit’ concept. The company has observed that many times, customers walk out of a store without buying due to the outlet’s inability to customise apparel to their satisfaction. To overcome this shortcoming, it have introduced My Fit, whereby a customer can customise the shirt or trouser as per his specification and preference. The order will be placed online and the product would be delivered to the customer. However a customisation charge of Rs. 300 will be charged extra,, Bhopatkar said. Van Heusen will also introduce the ‘My Fit’ concept to its women’s wear range also in the near future. On the other hand, organised retailers like Shoppers Stop and Walmart have drawn up huge investment plans to expand their physical and online presence as the industry faces dwindling sales and profits. While Shoppers Stop is planning to invest Rs.140 crore for expansion of its stores and online sale infrastructure within next one year, Walmart is seriously looking at opening 50 stores over next five years. The company has chalked out Rs 140 crore capex plan over next 12-15 months, which include investment of Rs.35 crore on development of technology and infrastructure for the omni channel, which is a combination of physical store and online site. The company has 73 stores now. It will be opening six Shoppers Stop stores, three HyperCity stores and five speciality stores during the next 12 months. This capex of Rs.140 crore by Shoppers Stop will happen from its internal accruals. In fact the company has already generated Rs.150 crore of cash through sales last year and hopes to generate around Rs.190 crore of cash through same mode over next year. So the capex will be raised from internal accruals. Again, Walmart India, which became a 100 per cent subsidiary of Walmart Inc last year following the break-up of its JV with Bharti group, has plans to open 50 stores across over the next five years. The company is focused on cash-and carry business. We have plans to open 50 stores in the next five years. We already have 20 stores and the 21st store will be opened in Agra in September. The company wants to grow in the B-to-B cash-and-carry and online businesses as well. Walmart is betting big on e-Commerce space as part of its business expansion plan in the country. The company has received good response so far for our online business at five places. Even though it has plans to bring our 15 more stores onto the e-commerce space during next five years, going forward for every new store, it will have B-to-B commerce too.Even though Walmart is currently focused on Andhra and Telangana to fuel its expansion, it is also eyeing the Northern states. Apparel brand Van Heusen plans to expand its exclusive brand outlet (EBO) count by 50 this year, which will take the store numbers to 300.
Sachin Tendulkar announces the upcoming Virginia – Smaaash, India’s fi rst Entertainment and Retail mall
Virginia Developers partners with Smaaash Entertainment (India’s first Urban Sports Park) to create an immersive in-mall sports entertainment experience in Whitefield, Bengaluru. Virginia Mall, promoted by the Ramaswamy family is set to become India’s first Entertainment and retail destination. Located in Whitefield, Varthur junction, Bengaluru, the mall will be inaugurated by the end of April 2015. The Indian cricketing legend Sachin Tendulkar – who is the brand ambassador of Smaaash, officially announced the partnership between Virginia and Smaaash. Speaking of the many highlights of Virginia Mall, Tendulkar said, ‘Virginia Mall will have a two-storeyed Go-Karting track on the terrace. This is something that you actually experience in certain Formula 1 races and the people of Bengaluru are going to have a similar experience. When I’m next in Bengaluru I will try and go there to experience the thrill of it”. Elaborating on the partnership with Virginia, Shripal Morakhia, Chief Imagination Offi cer, Smaaash added, “Through our partnership with Virginia, we will deliver an
unmatched range of superlative experiences that combines the most innovative in sports, music, dining and virtual-reality.” South India for all age groups of individuals Speaking on the occasion Vijay Kumar, CEO of Virginia Mall said, “Virginia is on its way to re-defi ne the mall experience in Bengaluru. It will have the right tenant mix based on the catchment to ensure great conversion rates. At Virginia, we believe the growth of every individual retailer in the mall is key to the overall success of the mall and we would work hand in hand with the retailers to create that uniqueness to ensure consistent footfalls.”The mall is all set to have many new features like mesh beacons, virtual trial rooms, virtual walkthrough terminals, interactive branding spaces, selfi e zones, signature walls, etc.Further to which, the “smart mall”concept via the mobile app will enhance the customer experience through interactive maps and mall catalogues and live streaming. The total 3.8 lakh sq ft of mall space will encompass entertainment and cutting edge sports simulators in Cricket, Football, Basketball, F1, Sky Diving, etc. In addition, the mall will house hosts of food options ranging from fine dining, rooftop dining, sports bar, a microbrewery and 50 different world-food stations hosting street food from all around the world. This innovative concept will combine loads of sport-entertainment, varieties of food from all over the world and vibrant shopping to become ‘The Ultimate Entertainment Destination’ – a first of its kind in South India for all age groups of individuals, families and friends. Virginia Mall will be launched with a high impact marketing blitz and a wide array of special events including music concerts, cultural events, awards nights and red carpet parties will keep boosting the footfalls. And weekdays will be sought after as the mall will be hosting special corporate events and packages. Thus Virginia-Smaaash is all set to be the entertainment and retail destination of Bengaluru.