Bengaluru: Indian retailer Arvind Fashions is betting on a stronger performance for the second half of the year (H2FY25), owing to expectations of a strong festive season. In an interview with DH’s Sonal Choudhary, Shailesh Chaturvedi, managing director and chief executive officer of the country’s second-biggest apparel company by net sales, revealed that the company is maximising its focus on premiumisation as it remains a key driver of growth. The premium brands retailed by the company in India include US Polo Assn, Tommy Hilfiger and Arrow.
How has the demand been and how do you see it for the rest of the year?
Clearly the markets have been muted, but we will see a strong uptick from the previous fiscal year - it could be high single digit or maybe double digit. Fortunately, in quarter one, we grew at 10 per cent. Even though the market continues to remain muted, we are very aggressively expanding, specifically our brand leader US Polo Assn. (USPA). However, the general belief in the industry is that the second half will be better because of weddings in the winter months. So we are eagerly anticipating and hopefully that should support growth. This Diwali has no World Cup, in contrast to the previous year and we are surely expecting better growth over that base of World Cup last year.
Any particular segment which you think will lead that growth?
Our company is benefiting from what we call casualisation. So if you really see one segment where we see consumers have shown an inclination to move to it's from very stiff formal wear to more casual wear. I think it's helping our brand because we have a very strong leadership in the casual category and we actually pivoted our business when we reset the company three, four years back in favour of casual brands.
Do you intend to scale your current adjacent category brands or launch more?
We want to aggressively grow brand appeal through adjacent categories and we have four areas that we're focused on - footwear, innerwear, kidswear and womenswear. We saw almost doubling of our womenswear business in April-June quarter. Currently, these categories account for more than 20 per cent of our business and they're growing faster than the industry and are already close to a Rs 600 crore portfolio. We are always looking at adding more adjacent categories to expand the brands and business.
What is your strategy to grow in the online channels as well as the tier II, III and IV cities?
Online accounts for between 20-25 per cent of our revenue and it is also opening a lot of new doors for us. We have created a lot of online exclusives, based on analytics, which sell well on that channel. So we are doing many things to keep the online engine growing fast. We are seeing a lot of new zip codes which are from the smaller tier towns and I think online is a very efficient way to service those customers. If we meet our internal sales target or if we see a competition doing a certain business in a smaller town, then it will be an indication for us that the market is getting ready. However, we still remain a largely big city company.
What are your targets in terms of store openings? Also, do you maintain your 10-15 per cent top line growth guidance for the remainder of FY25?
We want to open net 15 per cent square footage every year. Of course, the market needs to improve a little bit, but our growth engines are working well and we're very confident that our revenue guidance of 12 to 15 per cent growth will be achieved in FY25 as well as the medium term.