Arvind Fashions, led by Director Kulin Lalbhai, has decided to exit 4 brands where the company did not see a huge growth potential in times to come.
The performance of the company this quarter has suffered in lieu, owing to two major factors. Firstly, there is a one-time exit cost of these brands because whenever a business is exited in retail, retail stores, inventory and other things are written off.
Secondly, the growth of power brands is quite low and the company is looking at deaveraging it. Though they have seen a growth close to 12 per cent in power brands, the overall negative growth is due to this strategic business decision to feed the multi-brand outlets lesser.
Talking about the exit from 4 brands and looking forward to future earnings, Lalbai commented, “The portfolio which we have is strong on its earnings profile. Some of the drag brands have gone out, some of the loss making network has also gone out. The remaining portfolio is strong on profitability and once the trade channel stabilises, you will see that the underlying business is strong on profitability.”
The brand is looking at strengthening its omni-channel with Nnow.com that is gathering momentum in the market while focusing on the rest of its portfolio including Sephora and Gap. “The growth drivers for us will continue to be the casualwear segment but the new segments of growth for us are the beauty segment with Sephora. Also, we are growing strongly in the innerwear as well as the kid segment. These are all growth focus areas for the group,” he said.