09 May 2022, Mumbai:

The last few years have seen private labels gaining popularity in India. Nearly all major retailers from Reliance Retail to Spencer’s Retail, Metro Cash & Carry India, and e-commerce players like BigBasket, etc have launched private labels to survive in the ever-growing market*. 

A joint report by KPMG and Retailers Association of India (RAI) estimates, that the market for private labels in India is growing at 38 percent since 2016 and is expected to be worth Rs 2.94-lakh crore in 2022 from Rs 42,000 crore in 2016.

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Higher sales and margins

The growth of private labels in India is being driven by higher sales and better profit margins. The KPMG-RAI report shows, that private labels offer 40-175 percent higher margins compared to regular brands. They offer the same value as regular brands but at cheaper rates, says Harish Bijoor, Strategy Specialist & Owner, Harish Bijoor Consults.

Harsha Razdan, National Leade-Consumer Markets, Life Sciences, and Internet Business, KPMG India opines, that rising disposable incomes and a growing number of online channels are encouraging consumers to switch to branded products, fuelling the growth of private brands.

The pandemic also helped private labels with retailers leveraging growth in online shopping, points out Kumar Rajagopalan, CEO, RAI.

India’s largest retail company Reliance Retail launched a range of private label brands under its fashion and apparel chain, Reliance Trends. These included Netplay for formal office wear, Performax for specialized activewear, Fusion for women’s fusion-wear, Avaasa for women’s ethnic wear, and Rio for working women’s fashion. These brands contributed 75 percent to Reliance Retail revenues this year.

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Kolkata-based Spencer’s Retail also generates 13-14 percent of its business from private labels, says Shashwat Goenka, Director. Some of its fastest-growing private brands include Smart Choice, Double Tick, and Numkeen representing major food categories, while HandsOn, Clean Home, Bath & Beauty Co. The company witnessed tremendous demand in own labels Inscapes & Kitch.

Leading fashion and apparel retailer Shoppers Stop is launching 14 private labels including Altlife, Stop, Ivy Fern, and Fratini in the fashion segment. The share of private labels in overall business has grown from 11 to 15 percent in recent years, explains Venu Nair, Managing Director & CEO.

Control over inventory and quality

Razdan believes private labels can identify the gaps with conventional brands. Another reason for their success is product positioning, packaging, attractive prices, consistent supply, and aggressive platforms across regions. However, the success of private brands is limited to the mass market segments however, retailers' plans can also target the premium price points, says Bjoor.

There is a huge scope for the growth of private labels in India, Goenka feels. However, for this, retailers need to choose markets wisely. They also need to price their products correctly to attract more consumers.

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CREDITS: *Business Today report

02 May 2022, Mumbai:

Khadi and Village Industries Commission is the only fast-moving consumer goods (FMCG) company in India to reach Rs 1 lakh-crore turnover.

The company’s turnover grew 20.54 percent Y-o-Y during 2021-22 grew to Rs 115,415.22 crore against Rs 95,741.74 crore in 2020-21.

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KVIC’s overall production grew by 172 percent between 2014-15 and FY22, while gross sales during this period increased by over 248 percent.

Vinai Kumar Saxena, Chairman says, KVIC was able to achieve this massive growth due to new scientific methods and diversification of its product range.

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Its innovative ideas, schemes, and methodology helped the company diversify its product range and generate market interest, he adds.

In FY22, the khadi sector grew 43 percent to Rs 5,052 crore against Rs 3,528 crore in 2020-21. The village industries sector grew 20 percent to reach Rs 110,364 crore in 2021-22 from Rs 92,214 crore the previous year.

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Debt-ridden Future Group faces an uncertain future as three of its companies, Future Retail, Future Lifestyle Fashions and Future Supply Chain Solutions, stand on the brink of insolvency. All three companies have a total outstanding debt of Rs 6,474.98 crore. Of this, the total debt of Future Retail stands at Rs 4,876.88 crore, Future Lifestyle Fashions’ debt totals Rs 1,181.98 crore and FSCS’ debts amounts to Rs 416.12 crore.

Amazon terms Future-Reliance deal ‘unethical

As per media reports, in 2020, the Future Group had signed Rs 24,713 crore deal with Reliance Retail, a subsidiary of Reliance Industries. The deal entail Reliance Retail would buy out the wholesale, retail and logistics businesses of Future Group. However, the deal was opposed by US e-commerce company Amazon as it violated a 2019 agreement signed with the company. In mid-2019, Amazon had acquired 49 per cent stake in Future Coupons, giving it an indirect 4.81 per cent holding in Future Retail Ltd (FRL).

Impending bankruptcy threatens Future’s future deals

Last week, RIL refused to takeover Future Group’s businesses, as FRL’s secured creditors voted against the scheme. Bank of India also filed a bankruptcy petition against FRL before the National Company Law Tribunal (NCLT) that would come up for hearing for admission on May 12.

A bankruptcy trial before National Company Law Tribunal (NCLT), threatens Future Group’s future deals. Group stakeholders in the group are not sure of recovering the $4-billion debt from the company. The recent acquisition of important FRL stores by Reliance also thwarts Amazon’s ambitions to become a key player in India’s retail market.

Meanwhile Amazon has asked the RBI to undertake a forensic audit against Future Retail for the past three financial years to investigate alleged fraud by the company. Amazon said that Future Retail, its promotors and directors have defrauded by alienating over 945 store premises to Reliance Retail. It has also alleged that Reliance Industries has committed fraud while the lenders have failed to take cognizance of it.

“It is incumbent upon RBI to conduct a thorough investigation into the fraud committed by FRL, its promoters, directors and key managerial personnel (KMPs). Accordingly, it is requested that a forensic audit be conducted for FRL for the past 3 financial years as the RBI is empowered to inter alia under the RBI Fraud Circular, financial documents, and framework agreement,” Amazon has said. Amazon has also alleged Future Retail has been making contrary statements in its annual reports, and in the courts on whether it was facing a liquidity crisis or not. Amazon alleged that in its Annual Report for the financial year 2020-21, Future Retail stated that it did not face any liquidity crisis.

Liquidation may erode banks’ share in the company

Vivek Parti, Professional, Insolvency Resolution notes, with public sector banks rejecting the scheme of arrangement proposed by Reliance, Future Retail now faces liquidation under the Insolvency and Bankruptcy code. As per a Business Today report, to recover their dues, banks will have to fight it out or else they may get less than expected as the case moves to the IBC, opines Mahesh Singhi, Founder & Managing Director, Singhi Advisors, an M&A advisory firm.

Singhi advises lenders to have an alternative plan to recover their dues. Being a perishable industry, retail is an extremely challenging business to run, he says. The company has lost most of its employee and inventory. Besides, it does not own the property it operates on, he adds. Its insolvency may be just nine to 12 month away, he adds. As shareholders values continue to erode at break-neck speeds, banks will have to find a solution to minimize the extent of damage caused to them, opines Singhi.

05 May 2022, Mumbai:

Omnichannel retailer Lenskart plans to open more than 500 stores in Tier II and III cities in FY23. The brand is also penetrating Chhattisgarh, Jammu & Kashmir, Assam, Bihar, and Himachal Pradesh markets.

In FY 2022, it added over 400 stores in pan India.

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Lenskart had raised $25 million from existing investor Epiq Capital in its ongoing Series I round, informs Peyush Bansal, CEO and Co-Found.

Last month, the company raised $100 million from Alpha Wave Incubation.

Lenskart is currently negotiating with investors to raise $200 - 250 million funds to boost its valuation to $4.5 - 5 billion.

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The eyewear retailer opened its 1,000th store in Karol Bagh, Delhi.

Spread across 600 sq ft, the store features Lenskart’s flagship products including sunglasses, eyeglasses, and contact lenses.

Additionally, it provides free eye testing and specialized eye clinics, adds Bansal. Currently operational in Singapore, Dubai, and the US, Lenskart also aims to expand its store network in existing global and South East Asian markets like Indonesia and Vietnam.

It plans to increase its global customer base to $1 billion by 2027.

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03 May 2022, Mumbai:

Hugely popular during the 90s, the trend of loose-fitting and comfortable clothes is back.

The pandemic and ensuing lockdowns have made comfort a priority in fashion against the earlier focus on stylish but uncomfortable clothes.

Loungewear tops demand comfort clothing.

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The has been growing for the last few years as people adapted themselves to the changing times and switched to the ‘Work from Home’ mode.

The onset of summer has intensified this trend with more consumers opting for loungewear, athletic apparel, and comfortable clothing, says Satyen Momaya, CEO, of Celio, a French menswear brand in India.

Loungewear emerged as the most popular apparel category in 2020 and 2021, points out Momaya.

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Worn both inside homes and also in public places, loungewear is also environment friendly as it creates less waste.

Their popularity has grown because these clothes provide both comfort and style, Momaya explains. In the last few years, comfort clothing has also emerged as one of the most popular dressing styles for air travelers.

The resurgence of bright colors and extra-soft denims

According to Momaya, another popular trend is the resurgence of bright colors. Bold colors have resurfaced on the fashion scene, making summer days brighter and cooler.

Consumers are including bold colors ranging from pastel to neon in their summer wardrobes.

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Summer has also seen the resurgence of extra-soft denims that are softer than silk and as cool as linen.

These denims are paired with stylish linen shirts for a dapper look. In shirts, consumers are also opting for reversible, crepe, dobby, and printed varieties, Momaya points out.

Rise in ‘feminine fashion’

Another emerging trend is feminine fashion, affirms Momaya. Men are incorporating more pink and floral into their wardrobes.

They are mixing and matching styles, choosing bright colors, and adopting the athleisure style of dressing for a more comfortable and confident summer look.

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02 May 2022, Mumbai:

Sustaining its growth momentum, private equity-backed Gokaldas Exports reported a 58 percent jump in revenues and 280 percent jump in net profit, on a quarter-on-quarter basis, in its January-March 2022 quarter.

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The Bengaluru-headquartered company reported Rs 588 crore in revenues and Rs 61 crore in net profit during the quarter. For the full fiscal year of 2021-22, the company recorded Rs 1,801 crore in revenues and Rs 117 crore in net profit.

Siva Ganapathi, Managing Director, Gokaldas Exports says, the company is currently in the growth phase of its journey and the increase in demand post-pandemic had been beneficial to the company.

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It has been recording profits quarter-on-quarter, driving its vision of being a globally reputed apparel manufacturer, he adds.

“'People Power' has been the company’s biggest force that steered innovation, quality, consistency, and commitment in this financial year. As a leading manufacturer and exporter of apparel, it would continuously strive to achieve sustainable growth,” Ganapathiadds.

During the year 2021-22, the company reduced its gross borrowings by Rs 302 crore to Rs. 63 crore.

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