Cantabil bets on bigger stores to cross the Rs 1,000 cr mark

Store expansion is no longer simply about adding outlets for Indian value fashion brand. Retailers are using larger formats, wider assortments and deeper regional penetration to raise revenue per store and capture a larger share of the family apparel wallet. Delhi-based Cantabil Retail India is pursuing this strategy aggressively. After closing FY26 with operations revenue of 852.6 crore and net profit of 95.8 crore, the company is targeting over 1,000 crore in revenue while adding around 80 stores in FY27. The expansion is accompanied by a deliberate shift towards larger outlets, with most new stores expected to occupy 2,000-3,500 sq ft and select flagship formats extending to about 8,000 sq ft.

Bigger stores, bigger baskets

The logic is straightforward: more floor space allows Cantabil to move from a predominantly menswear-led proposition towards a broader family-fashion destination.

Table: FY26 Performance & FY27 growth targets

The move creates room for womenswear, kidswear, footwear, innerwear, accessories and athleisure alongside the company’s established formal and casual menswear categories. This matters because larger assortments can increase units per transaction and encourage households to consolidate purchases under one roof. Cantabil’s retail footprint has already expanded to more than 9 lakh sq ft, while EBITDA margin reached 33.2 per cent in Q1 FY27, according to the information provided. Footwear is also being developed as a meaningful adjacent category, with the company targeting roughly 4 per cent of revenue from the segment.

As per Deepak Bansal, Whole-Time Director, the company expects to reach about Rs 1,000 crore turnover in the current financial year and add around 80 stores. The company intends to retain its existing ownership mix, with roughly 70% of its network company-owned and 30 per cent franchise-operated.

Smaller cities drives scale

The larger-store strategy is particularly relevant outside India’s major metros. Cantabil’s network is concentrated heavily in Tier-II and Tier-III markets, which together account for roughly 80 per cent of its stores. These markets are moving from fragmented local retail towards organized brands offering predictable pricing, branded merchandise and a wider assortment.

For consumers in smaller cities, a 2,500-3,500 sq ft store can therefore function as more than a fashion outlet. It becomes a family shopping destination. The model also gives retailers a physical branding advantage in markets where high-street visibility can substitute for expensive customer acquisition campaigns. The company’s stated network strategy places approximately 20 per cent of stores in Tier-I markets and 40 per cent each in Tier-II, III cities. North and West India remain established territories, while South and East India offer significant greenfield expansion opportunities.

Deepak Bansal points to rising fashion awareness in smaller cities, driven partly by digital content. With Cantabil’s average selling price at around Rs 1,100, the company is positioning itself between unorganized value retail and more premium national fashion chains.

Manufacturing supports expansion

Store growth, however, can become expensive if retailers lack supply-chain control. Cantabil has an advantage through its internal manufacturing facility in Bahadurgarh, Haryana, which has annual capacity of about 18 lakh garment pieces and supplies roughly a quarter of the merchandise sold by the company. This vertical integration gives greater control over design, production and inventory replenishment. It can also help the retailer respond faster to demand shifts while protecting margins against fluctuations in fabric and other input costs.

That becomes particularly important as stores carry more categories and sizes. A larger-format strategy can increase sales potential, but it simultaneously increases the number of stock-keeping units that need to be forecast, replenished and eventually cleared.

Cantabil is therefore targeting a reduction in its working-capital cycle to below 100 days from 105 days in FY26. Inventory management has already improved, with inventory reportedly declining from 121 days to 114 days. An enterprise-wide ERP rollout is expected to provide further visibility across inventory and supply-chain operations.

Growth without debt

Capital discipline is another important component of the strategy. Larger stores require higher initial spending on leases, interiors, fixtures, inventory and manpower. A rapid rollout can consequently strain cash flows even when reported profits remain healthy. Cantabil’s approach is to fund expansion through internal accruals while maintaining a debt-free balance sheet. CFO Shivendra Nigam describes cash flow as a priority over the P&L and said planned store and infrastructure expenditure is being funded internally. This gives greater resilience if store ramp-ups take longer than expected. It also reduces exposure to rising financing costs, although it places greater pressure on operating cash generation.

The central question is whether additional square footage can generate sufficient incremental revenue. Cantabil’s same-store sales growth was 5.24 per cent in FY26 and 4.04 per cent in Q1 FY27. Those numbers suggest that network expansion, rather than like-for-like growth alone, will remain a major driver of the company’s near-term revenue ambitions.

The larger-format model also carries execution risks. More floor space means higher fixed costs, while broader inventories increase markdown exposure. Apparel demand is seasonal, with a significant share of annual sales concentrated in the second half of the financial year around festivals, weddings and winterwear. A weak festive season or adverse weather could therefore leave recently opened stores carrying excess inventory. The challenge will be to ensure that larger stores improve sales productivity rather than merely increasing the company’s cost base.

Facing Zudio and others

Cantabil is expanding at a time when competition in affordable fashion is intensifying. Trent’s Zudio, Reliance Trends and Max Fashion are all pursuing aggressive store-led expansion and competing for similar value-conscious consumers. Cantabil’s response is to combine physical reach with marketplace-led digital distribution rather than compete exclusively through discounting. Its expansion across more than 300 towns is intended to strengthen proximity to consumers while the broader assortment increases opportunities for cross-selling.

This strategy also reflects a broader change in Indian fashion retail. Physical stores are no longer competing with online channels purely on convenience or assortment. Instead, successful stores increasingly serve as experience, discovery, fulfilment and family-shopping hubs.

The Rrs 1,000-cr test

Cantabil’s next phase is ultimately an experiment in retail productivity. Adding 80 stores can take the company closer to the Rs 1,000-crore revenue threshold, but the more significant transformation is taking place at the store level. The move from 1,400 sq ft outlets to 2,000 sq ft-plus format changes the economics of each location by increasing assortment, transaction potential and customer dwell time.

If the company can sustain margins, shorten its working-capital cycle and generate adequate sales from larger stores, the strategy could create a scalable model for value-fashion expansion beyond metros. The broader lesson for Indian retailers is clear: in a market where consumers increasingly expect branded fashion at accessible prices, growth may not come from simply opening more stores. It may come from making every store substantially more productive.