Arvind expects consumer demand to pick up next year

Arvind Textiles registered a 36 percent decline in net profit to Rs 58 crores for the quarter ending June 30. Net sales at the company’s retail and brands business, which accounts for 28 percent of the company’s turnover increased 14 percent to Rs 527.96 crores from Rs 462.87 crores. Losses at the retail business widened during the June quarter to Rs 7.05 crore from Rs 2.02 crore.

According to J Suresh, Managing Director and Chief Executive at Arvind Lifestyle Brands and Arvind Retail, demand is expected to revive only next year since retail industry continues to suffer. While the festive season is anticipated to be positive for apparel retail, the real bounce back is expected on by next year.

For this fiscal year, the company projects growth estimate of 14-15 percent for its retail business with improvements in margins in the brands and retail segment. During the quarter, the company opened the county’s first store for American fashion label GAP and announced a licensing deal with American children’s apparel brand Aeropostale.

The company has been slowly shifting focus towards brands & retail segment, whose contribution increased from 22 percent in FY10 to 30 percent in FY15. It expects this to go to 35 percent in FY18. According to a recent Motilal Oswal report, the management of Arvind is expecting to double revenues and margins in the brands and retail business over the next three years. Arvind is also looking forward to open six more GAP stores by the end of FY16 and 15 stores by the end of FY17. ‘The Children’s Place’ launch is likely by Q3FY16 and e-commerce portal by November 2015.