Arvind Fashions Ltd (AFL) on Thursday said 75 percent of its stores are operational now after the easing of lockdown relaxations, though footfalls and revenue remain well below pre-COVID levels.
According to a PTI report: Sharing an update on the impact of the pandemic on its business, the company said while in the short run there would be disruptions, it expects “the strength of its brands, coupled with launch of new relevant product and investments in digital and omnichannels will help it overcome the challenges and react to evolving situation faster”.
Post-lockdown, the company has been progressively reopening its stores following due regulatory guidelines and safety and hygiene standard operating procedures (SOPs), and ensuring appropriate social distancing norms, it said.
“Currently 75 percent of our stores are operational, though footfalls and revenue remain well below pre-COVID levels. In the meantime, the company has invested behind and scaled up its digital and omni capabilities and good traction is being achieved in this important channel,” AFL was quoted by PTI as saying.
The company has a network of 1,290 stores, while it is also present across approximately 10,000 multi-brand outlets with more than 3,700 points of sales in department stores across India.
AFL said it has put in place a “comprehensive cost management plan that covers significant reduction in costs during the lockdown period and until sales normalise. In addition, structural reductions have been effected in the cost structure that will have the impact of reducing company’s breakeven levels by 35 percent”.
Actions have also been initiated to conserve cash by cutting down capex, reducing inventory levels, controlling immediate buys and bringing a strategic flexibility in the buying process, it added.
On the outlook, AFL said as the market reopens post the lockdown, it is well-positioned to resume full operations at the earliest.
“With sharpened product portfolio suiting to customer requirements, entrenched distribution network along with capability build-up in analytics for demand planning and fulfilment as well as omnichannel, AFL is strongly placed to recover faster from the impact of ongoing pandemic,” it was quoted by PTI as saying.
Arvind Fashions Ltd on Thursday reported a consolidated net loss of Rs 208.12 crore for the quarter ended March 2020, impacted by COVID-19 outbreak and subsequent disruptions in the market. The company had reported a net profit of Rs 21.30 crore in January-March quarter a year ago, AFL said in a regulatory filing to the BSE.
Revenue from operations fell 39.22 percent to Rs 710.46 crore during the quarter under review as against Rs 1,168.96 crore in the corresponding quarter a year ago.
“During January and February, the company was on track to meet its internal plan. However, revenue was severely hit in March as COVID-19 impacted sales across the channels. This has adversely impacted the reported Q4 FY20 revenues and profitability,” AFL said in a post-earnings statement.
The company’s total expenses declined 22.98 percent to Rs 895.58 crore as against Rs 1,162.89 crore in Q4 of 2018-19.
For fiscal year 2019-20, the company reported a net loss of Rs 399.36 crore. It had posted a net profit of Rs 21.48 crore in the previous fiscal.
Its revenue from operations in FY20 declined 16.74 per cent to Rs 3,866.30 crore as compared with Rs 4,643.86 crore in 2018-19.
“Completion of key strategic steps during the year have lent fundamental strength to our business. While COVID has been an unprecedented event which has significantly impacted the entire retail industry, as a leading casual wear company with a portfolio of brands with leading market positions and key capabilities in digital and omnichannel, we expect to gain market share as business gets back to normal,”J Suresh, MD & CEO, AFL said in a statement.
AFL is country’s leading player in casual and denim segment and hosts a strong portfolio of fashion brands both international and indigenous which includes – US Polo Assn., Arrow, GAP, Tommy Hilfiger, Calvin Klein, Flying Machine and Sephora.