Fabindia’s net profit falls 42 per cent in 2017-18

Clothing retailer Fabindia’s sales growth fell to its lowest in more than a decade in 2017-18, hurt by sourcing issues during the government’s demonetisation drive as well as increased competition from large chains and private label brands. The 58-year old firm, popular for selling ethnic products sourced mostly from rural areas, posted a 2 per cent rise in sales from the previous year to Rs 1,060 crore on a standalone basis. The company’s net profit for the year declined 42 per cent to Rs 59.33 crore.

Lower profit was due to an impairment loss of Rs 57 crore. Business for the company was hit after the government’s November 2016 demonetisation drive, as it saw restricted supplies from craftsmen for the next six-eight months. Fabindia was founded in 1960 by John Bissell to market the craft traditions of India. It started out as an exporter of home furnishings and the first retail store came up in the Greater Kailash area of Delhi, 15 years later. In 2000, the company added the non-textile range, while organic foods and personal care products were launched nearly a decade ago. During the year, it opened 43 new stores, taking its overall door count to 275.

Last fiscal, Fabindia also launched four separate business units (SBUs)—Home and Lifestyle, Personal Care, Fabcafé and E-commerce —to sharpen focus and expand.