V-Mart Retail Ltd., India’s leading value fashion retailer, has reported a full-year income of Rs 1,097 cr for FY21, a recovery of 66% YoY, in a challenging Covid-19-impacted year.
Despite lower operating days, reduced topline and marginalised savings due to largely fixed cost structures, YoY EBITDA recovery remained high at 61% with 12.2% EBITDA vs. 12.9% reported for FY20 Reflecting the Covid-19 impacted performance and the added impact of IndAS 116 induced lease rent accounting, the company reported its first-ever yearly loss of Rs -6 cr in its 19-year history.
“Q4 which saw a renewed customer demand on the back of improved customer footfalls and strong pent up demand coming in for new summer season fashion, saw a Y-o-Y recovery of 106% with an income of Rs 356 cr. While the overall footfalls in the quarter remained low at 88% YoY, an increase of 8% in basket size and higher customer conversions helped improve the topline. Improvements in inventory freshness and better full-price sales helped deliver a relatively better EBITDA growth of 21% YoY for the quarter,” the company said in its earnings statement.
V-Mart Retail opened 20 new stores in FY21 (7 in Q4), taking the total store count to 279, growing the total retail area by 7% YoY to 23 lakh sq ft at FY21-end.
“With a healthy 90 days of inventory for the quarter (lower by 10 days YoY) and a Rs 400+ cr. cash reserve, on the back of a recently concluded QIP fund raise in February, the company is placed in a strong position to expand and grow its presence,” the statement added.
Commenting on the Company’s Q4FY21 performance, Lalit Agarwal, CMD, V-Mart Retail Ltd. said, “Notwithstanding the pandemic, we did reasonably well in Q4. The business prepped up quickly. The company secured 110% of the corresponding sales for the same quarter of FY20. We managed to achieve footfall recovery of over 80% for the quarter as a whole. We are also well poised as far as inventory levels and freshness is concerned, with strong sales without much discounting.”
“V-Mart is concentrating on quicker mind-to-market strategies as far as fashionable apparels are concerned. For instance, our range of streetwear, sweatshirts, hoodies, and top-of-the-line ladies’ dresses. This is being done to meet the rising aspirations of the youth and younger families.” he added.
“We are further boosting our private label offerings, which are now approximately 65%% of our apparel section. We are developing product quality enhancement and vendor development programs to enhance the fashion quotient across all our departments.”
The retailer is also in the process of revitalizing its omnichannel platform by creative and compelling products and shopping experience as it could offer a tremendous boost to overall sales going forward, Agarwal stated.
Founded in 2002, V-Mart has 279 stores with an average store size of approximately 8,000 sq. ft. The company follows the concept of ‘value retailing’ by fulfilling the growing aspiration of the rapidly-expanding middle class for affordable, high-quality fashion.