Why Raymond is turning inward to win big, the economics of Bharat consumption

https://www.dfupublications.com/index.php/component/search/?searchword=raymond&searchphrase=all&Itemid=22725 February 2026, Mumbai

At a time when many Indian apparel exporters are still scanning tariff schedules in Washington and freight routes through the Red Sea, Raymond is doing something unfashionable: it is staying home. The company that once measured success by how far its worsted suiting reached across global markets is now measuring it by how deeply it penetrates India’s Tier II and Tier III wardrobes. The shift is not defensive. It is structural. And it signals a larger thesis about the next decade of Indian retail: domestic demand, not exports, will define who wins.

At the centre of this recalibration is chairman Gautam Hari Singhania, who has reframed Raymond Lifestyle’s strategy around what he calls a simple logic reduce global noise, compound local certainty. The bet is that Bharat’s rising disposable income, wedding-led consumption cycles, and premium aspirations are more predictable than geopolitics. And so far, the numbers suggest he may be right.

From export exposure to domestic insulation

If the last five years were about chasing international volumes, FY26 looks like a reset year one where Raymond is deliberately insulating its earnings from overseas volatility. While global garmenting faced margin pressure from freight costs, currency swings, and tariff uncertainty, Raymond’s domestic engine fired at full throttle. The result: its highest-ever quarterly revenue.

Table: Highlights of Raymond Lifestyle, recent performance

The statistics reveals the company achieved its highest-ever quarterly revenue in Q3 FY26, with EBITDA margins growing to 14.4 per cent due to premiumization and wedding-season demand. While technically maintaining a ‘near-net-cash’ position, recent filings show a minimal net debt of approximately Rs 15 crore, effectively keeping the balance sheet debt-neutral. Being net debt-free also gives Raymond flexibility to expand without balance-sheet stress a luxury many peers don’t have. The store count reported in recent investor presentations reached 1,675 total points of sale by the end of December 2025, though your specific data highlights the primary exclusive store growth pattern. Overall strong domestic growth in textiles (11 per cent YoY) and apparel (5 per cent YoY) successfully offset a 17 per cent decline in garment exports caused by global trade headwinds.

Winning India beyond metros

Raymond’s next growth story is not Mumbai or Delhi. It is Indore, Coimbatore, Guwahati and Nashik. Management believes aspirational consumption is shifting outward. Smaller cities are showing higher ticket sizes, stronger festive purchases, and deeper brand loyalty especially in formalwear and occasionwear. Instead of flagship-only expansion, the company is pursuing saturation retail smaller stores, denser presence, faster turns.

Table: Planned retail expansion strategy (next 3 years)

The data highlights, leaner retail model with a shift from 2,400 to 1,800 sq. ft. is designed to reduce fixed overheads and rental costs, particularly in Tier II and II cities, where the company aims to significantly increase its footprint. Moreover out of the 900 total new outlets planned over the next three years, the majority will follow the Franchise Owned Franchise Operated (FOFO) route to maintain a debt-neutral balance sheet.

Segment diversification is also in focus with Ethnix by Raymond aiming to nearly triple its physical presence to 300+ stores. It’s also facing global headwinds including US tariffs by diversifying the order book toward the UK, Europe, and Asia-Pacific. The management has explicitly stated a goal to double EBITDA to over Rs 2,000 crore (Rs 20 billion) by FY28, supported by a 12-15 per cent sales CAGR.

The crux is smaller footprints reduce capex per store and improve payback cycles. Raymond is trading glamour for economics prioritising faster breakeven over marquee addresses. The playbook resembles FMCG distribution more than traditional apparel retail.

Building a full closet brand

For decades, Raymond equalled suiting fabric. That positioning built trust but limited wallet share. Now the company wants to own the entire wardrobe. Sleepwear, casuals, innerwear, and occasion-led ethnic lines are becoming growth engines. ‘Ethnix by Raymond’ targets the premium weddingwear opportunity, while comfort-led categories capture everyday usage. Analysts, including Deloitte, estimate India’s ethnic occasionwear segment is growing at a 25-45 per cent CAGR, which is among the fastest-growing apparel niches globally.

Table: Category diversification mix

Raymond is gradually reducing dependence on fabric sales, historically cyclical and price sensitive and increasing branded apparel exposure, which offers 2-3x higher margins. Raymond currently holds a significant share of the men’s wedding wear market, with the Ethnix brand being the primary vehicle for increasing its footprint in the organized ethnic space. The growth in apparel and ethnic wear is supported by a plan to add 250-300 new stores annually.

A quiet but crucial lever has been pricing power. Rather than chasing volumes, Raymond has nudged consumers toward higher-value fabrics: wrinkle-resistant wool, stretch blends, technical finishes. The result is a steady rise in average selling prices.

Table: Suiting & fabrics: operational efficiency & premiumization

The table shows this is classic premiumization: modest price increases layered over innovation. Instead of competing with commoditized cotton mills, Raymond is positioning as a functional luxury brand heritage plus performance. The 14-point jump in ‘Premium Blend Share’ (such as the Regio Italia line) is the primary driver for the margin growth. These products carry significantly higher markup compared to entry-level suiting. The Indian buyer, especially for weddings and festive cycles, is proving less price-sensitive than expected. What’s more despite fluctuations in raw material costs (like Australian wool prices), the shift to a branded, retail-heavy model has allowed the company to maintain pricing power and expand gross margins by 600 basis points.

Corporate structure is also being simplified. Following the listing of Raymond Lifestyle, the group is carving out Raymond Realty and continuing with an engineering vertical. Each unit now has capital autonomy and sharper accountability.

The Bharat thesis in action

Raymond’s playbook reflects a broader macro shift. Three trends are emerging:

• Rising incomes in non-metro India

• Strong wedding and festive spending

• Brand preference moving from unorganized tailoring to ready-to-wear

In this environment, legacy brands with trust capital and distribution muscle enjoy an advantage over digital-first entrants. While D2C labels win attention, Raymond still wins occasions like weddings, ceremonies, first jobs moments where reliability trumps experimentation. That emotional equity is difficult to replicate.

Raymond’s transformation is not flashy. There are no viral campaigns or overnight reinventions. Instead, it is methodical: cleaner balance sheet, sharper categories, denser retail, higher ASPs. It’s less about becoming global fast fashion and more about becoming India’s default formalwear and occasionwear authority. In a decade where many exporters are hostage to geopolitics, Raymond’s ‘India First’ bet looks less like retreat and more like realism. Because the biggest growth market it needs might already be at home. And if Bharat keeps spending the way it has, the company may find that depth, not distance, is what truly scales a legacy.

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