Value fashion retailers achieve 24% revenue growth in FY25: Report

20 June, Mumbai 2025

Fueled by a young, aspirational consumer base from India’s Tier II, III, and IV towns, value fashion retailers in India outshone premium fashion retailers by achieving 24 per cent revenue growth across leading players in FY25, as per a report by Motilal Oswal Financial Services.

While many legacy brands grappled with demand normalization and challenges in converting foot traffic into sales, value retailers like Vishal Mega Mart (VMM), V-Mart, V2 Retail, and Baazar Style Retail (BSR) demonstrated consistent store expansion, healthier margins, improved cash flows, and robust like-for-like sales growth.

V2 Retail led the charge with an impressive 62 per cent revenue growth and a strong 29 per cent same-store sales growth (SSSG). BSR followed with 13 per cent SSSG and Vishal Mega Mart with a 12 per cent SSSG rise. Boosted by festive season momentum and a high 70 per cent repeat customer rate, Unlimited (UL) also recorded a 9 per cent growth in SSSG, particularly benefiting from enhanced store experiences and improved product assortments in southern India.

Retailers’gross margins also expanded by approximately 50 basis points to 29.9 per cent during the year. Vishal Mega Mart led this improvement by 80 basis points, largely due to private labels now constituting 73 per cent of its revenue. Showcasing a dramatic rebound in profitability, V-Mart achieved a 4.4 per cent margin, primarily driven by reduced losses from its online platform, LimeRoad, and better offline productivity. While maintaining stable gross margins, V2 Retail registered a 220 basis rise in EBITDA margin to 7.8 per cent, its highest ever.

Driven by a deeper penetration into smaller cities, India’s retail space expanded by 16 per cent Y-o-Y in FY25. V2 Retail spearheaded this expansion with a 62 per cent increase in its retail footprint, followed by BSR (31 per cent), VMM (11 per cent), and V-Mart (10 per cent).

Despite rising cost intensities from warehousing and staffing, value retailers are entering FY26 with cautious optimism. The strategic guidance is clear: maintain 15-20% area growth, deliver high single-digit SSSG, and remain disciplined in capital deployment. Margin gains from FY25 are likely to be reinvested into customer acquisition and product expansion, particularly through private labels.

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