Raymond optimistic about retail growth
S V Krishnamachari, Hrithik Kiran Bagade, Bangalore, Nov 24, 2012, DHNS : 21:48 IST
The subdued consumer sentiment notwithstanding, fabric and apparel company Raymond is optimistic of growth in its textiles and apparel business, and is firm on opening more stores this fiscal and over the next two years.
A senior executive at Raymond said expansion plans chalked out two years ago are firmly on course. “We have already opened 250 stores in the previous two years and will be opening another 250 in the coming two years.
In a full year, each store on an average contributes about Rs 60 lakh revenues,” said the company's President (Retail & Business Development) Rakesh Pandey.
The company opened 70 stores in the first six months this year including 42 in the second quarter and plans to add another 30 in the second half this fiscal, including made-to-measure format stores.
On demand pickup during the ongoing festive season, he said that pre-Diwali sales growth was about 10-15 per cent compared to last Diwali, as against the expected 20 per cent. “The impact of cyclone ‘Nilam’ led to diminished footfalls and impacted sales in the south.”
Raymond wrote off apparel inventory worth Rs 5 crore last quarter, according to a presentation made to analysts in October.
Its like-to-like sales turned positive in the second quarter with a 3 per cent growth compared to minus 3 per cent in the first quarter. “We see growth trending at about 7 per cent for the full year.” The company’s apparel brands include ColorPlus, Park Avenue and Parx.
The company posted consolidated revenues of Rs 1,115 crore for the quarter ended September 30, 2012, compared to Rs 982 crore in the same period last year. Net profit was down 38 per cent to Rs 50 crore, compared to Rs 80 crore on a year-on-year basis.
The company said it will spend Rs 13 crore on VRS for its employees in the third quarter, apart from Rs 32 crore spent in the first six months this fiscal, as part of its effort to improve operational efficiencies.