During FY 19-20, Aditya Birla Fashion, which owns and operates iconic brands such as Louis Phillipe, Van Heusen & Peter England among others, had a turnover of Rs. 4,373 Cr between Apr. – Sep. ‘19. During the recently concluded same period in 2021, the company achieved Rs. 2,866 Cr in it’s consolidated turnover. What’s comforting is that the figure was twice that of what the company achieved during the same period in 2020, the peak pandemic period. However, the company reported a negative PAT of Rs. 357 Cr compared to a profit of Rs. 19 Cr during the same period in 2019. During the Quarter ended Sep. ‘21, the company reported a turnover of 1,996 Cr., up 96% compared with the same period during FY 20-21 and down by just 13% compared with FY 19-20.
Interestingly, Pantaloons, the family department store chain grew it’s EBITDA to 18.8%, up from 15.9% Pre-covid levels, thanks to higher efficiency, lower business costs (manpower and rent) among other factors. However, the EBITDA for the corresponding period in Q2 FY2021 was a tad higher at 19.2%. This could be because of rental waiver which the store chain received across Malls where it operated. On the revenue front, the department store chain achieved Rs. 665 Crores, up 80% over the JAS Quarter in 2021, still only 73% of it’s pre-covid levels in FY 19-20. Once again, this is perhaps due to lower footfalls at Malls, where the chain has a predominant presence within it’s 347-store network across India.
The company’s Lifestyle Brands including Van Heusen, Louis Philippe, Allen Solly and Peter England have shown great resilience recording a retail turnover of Rs. 506 Cr in the immediate past Quarter compared to the same period in FY 19-20, a growth of 25%. The wholesale channel, where the company sells it’s brands to Multi-Brand Outlets (MBOs) across India, however, is still at 50% of the pre-Covid average. The company has also opened 50 new stores in the past 12 months, taking the total count of it’s Exclusive Brand Outlets (EBOs) to 2,754. Ethnic brands and E-commerce have also recorded strong sales according tot he company’s Quarterly report which can be accessed here.
There are some solid learnings here from the Quarterly report of one of India’s most respected Fashion retail company.
The aspirational middleclass Indian, who has been going to a physical workplace since early 2021 is now willing to shop for a newer wardrobe. While Pricing concerns remain, the uncertainty over the pandemic seems to be lesser now than what it was around the same time last year. Going by the recent figures released by CAIT that the festival shopping this year was to the tune of Rs. 1.25 trillion, formal and semi-formal wear shopping for office & leisure seems to be back, a first indication that the retail industry which has been struggling for the past 18 months is finally taking shape to it’s older form.
Network expansion, a key metric to assess the growth of a brand, clearly indicates that more customers are open to shopping in the physical environment after outdoing their shopping online over the past few months, a trend which was considered extremely dangerous for the USD 200 Billion pa semi- and Organised Offline Retail Industry.
Thirdly, the recent financial results of Aditya Birla Retail, which has set benchmarks in the fashion and apparel retail Industry in India for the past 3 decades as a leader in the space and also a guiding light for smaller and newer brands, brings solace to the Industry that the economy is lowly but surely getting back on track. While the talk of reaching ~80% levels of pre-pandemic Sales seem to be a bit too premature – given that this is the festival Quarter and there is a lot of pent-up demand, the fact that things are finally looking positive is a great relief to the Industry at large. Needless to say, one can expect better than expected stellar results for Q3 as well, if the same trend continues.