Khadim India to finalize distribution arm demerger by March 2025
17 February 2025, Mumbai
Footwear major Khadim India aims to finalize the demerger of its distribution business by March 2025, with a subsequent stock market listing by May.
Khadim also plans to collaborate with platforms like Zepto for its foray into quick commerce for utility products like school shoes and EVA slippers/
Besides, the Kolkata-based footwear maker plans to boost its margins and valuations by separating its distribution and manufacturing activities into KSR Footwear. (KFL). This will help the company unlock significant value for its core retail business. The company expects a margins to expand by 100-200 basis points for a full-year operation in FY’26, points out Indrajit Chaudhuri, Chief Financial Officer.
In Q3, FY25, the distribution business contributed 31.2 per cent to Khadim’s revenues. The brand also added 50 new distributors during the quarter, bringing the total to 776.
To boost sales, Khadim reduced prices on existing products and introduced new, lower-priced items. The company aims to increase its online revenue share (currently 4-5 per cent) by optimizing product selection and digital marketing.
As a part of its diversification strategy, Khadim also plans to launch an athleisure segment in the spring/summer season. Along with higher-margin products, this will help improve gross margins. Besides converting underperforming stores into a commission-based model, Khadim is also reducing fixed costs, particularly in e-commerce, by outsourcing warehousing and converting fixed costs to variable costs to improve profitability.
In Q3, FY25, the company reported a 2.5 per cent Y-o-Y growth in revenues to Rs 160.2 crore.
