Aditya Birla Fashion to open 500-plus stores this fiscal

MUMBAI: Aditya Birla Fashion and Retail, the country’s largest clothing firm, plans to open more than 500 outlets this year, nearly three times its average annual expansion, at a time when the overall economic slowdown has made most retailers go slow on increasing brick-and-mortar network and shift focus to online.

The firm that runs brands such as Louis Philippe and Pantaloons is betting on consumers shifting from the unorganised market to branded apparel.

“The general consumption habits are changing, especially in a digitally connected network, when you are seeing desire for brands and aspiration for better quality products,” said Ashish Dikshit, managing director at Aditya Birla Fashion and Retail (ABFRL) that runs more than 3,000 outlets. “There is a very large upgradation and movement to buy brands and the opportunity in a country like India will keep emerging from new markets.”

With liquidity stress persisting in wholesale channels, most retailers across consumer products, liquor and apparel have been facing pressure to push inventory in smaller towns and hinterland.

Experts said the underlying situation hasn’t dramatically improved due to liquidity issues and there is still nervousness in terms of stocking up.

“The wholesale business appears to be undergoing some structural shift triggered by liquidity issues in the economy and management (of ABFRL) is strategising to invigorate the same whilst simultaneously speeding up exclusive brand outlets (EBOs) expansion, including conversion of some large wholesalers into EBOs,” JM Financial said in a recent investor note.

The company said its growth has so far remained unaffected by newer rivals as each of its top brands — Louis Philippe, Van Heusen, Allen Solly and Peter England — generate Rs 1,000-1,500 crore in annual sales, each bigger than fast fashion rivals.

It now plans to launch a new mass-market ethnic wear brand. “One of the segments we have always sort of stayed away from was ethnic wear because we thought it was fragmented, (and that the) ability to build brands will be lower,” said Dikshit, who started his career in the group 25 years ago. “We (have now) realised we are missing on a very large opportunity. Women’s wear is 40% of the overall apparel market, and three-fourths of that is traditional.”

Last year, ABFRL had acquired artisanal online retailer Jaypore-.com and 51% stake in Finesse International Design, which runs bespoke apparel retail brand Shantanu & Nikhil, to enter the premium ethnic wear segment.

Same-store sales growth of the company’s lifestyle brand division at 15% was one of its highest ever during last quarter while Pantaloons that opened over 40 doors in a year, reported record operating profit at Rs 109 crore with margins crossing 10% for the first time. Also, it will put a 12-season inventory model which will help in bringing freshness to the assortment mix and allowing trade partners to right stock inventory.

The overall apparel market of India is valued at Rs 5.3 lakh crore, according to Nielsen. With annual sales of Rs 8,117 crore in FY19, ABFRL has strong presence across men, women and kids apparel, but it is largely restricted in western wear formats. But it is increasingly getting competitive with global fashion brands such as Zara, H&M and Vero Moda pushing their lower priced westernised clothing in their market.