Casualwear next growth driver for Arvind Fashions as it scales digital capabilities

Expecting online sales to cross the Rs 10,000 crore mark soon, Arvind Fashions has made huge investments in various digital channels. Not only does the company sell on all third-party portals, it has also scaled up its own website, said Kulin Lalbhai, Director to the Economic Times. Currently, the company is integrating stores with online channels to ramp up sales. 

Positive results from Flipkart partnership

Having seen incredible traction last quarter, Arvind Fashions has collaborated with Flipkart to build its brand Flying Machine. The partnership will help Arvind Fashions explore the best of both worlds, Lalbhai feels as it combines Flipkart’s reach and analytics with Arvind’s brand-building capabilities and supply chain. The partnership is already yielding positive results with territory sales of Flying Machine growing almost 70 percent during the festive season. 

Sales recovery with efficient cost management

The company’s offline sales are also promising, says Lalbhai. It saw a healthy recovery in January sales and expects the trend to continue. It also plans to get a lot of fresh merchandise in stores from February onwards, he adds. Meanwhile, Arvind Fashions managed to cut down a few the costs like temporary rental reductions and other costs during the pandemic. Though these costs are expected to rise again, the company has done a lot of structural cost savings, adds Lalbhai. It has not only reduced employee headcount but also cut supply chain costs. Arvind Fashions is also working on raw material costs and plans to introduce new strategies to prevent margin dilution and price corrections due to an increase in prices. Robust revenues in Q2 & Q3

The company clocked in robust revenue growth in both the second and third quarters of the current financial year and had a much better bottom line. Currently, its offline sales have recovered to 70 percent of pre-COVID levels while online sales are 230 percent of last year. Adjusted for the Ind-As accounting, the company’s EBITDA is also much better than last year’s third quarter. Most of its brands are gaining market share through sales on Flipkart and the company expects the trend to continue. 

Casual wear to drive future growth

Lalbhai believes, the current casualization trend is not a response to COVID but existed even before that. The pandemic has only accelerated this trend with workwear transforming from formal to semi-formal. He expects casual wear brands like Tommy, Calvin Klein, and US Polo to continue growing and emerge stronger from the pandemic. T-shirts and polos will lead casual wear growth post-COVID, says Lalbhai. He also expects rapid growth for the footwear segment in times to come.

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