Raymond to focus on 17-18 percent annual growth in two years

The 90-year-old Raymond Group continues to grow and expand under the direction of chairman and MD Gautam Singhania. This year, it will be investing Rs 1,400 crores in the Amravati project which is the largest integrated textile and garment manufacturing unit at the textile park in Amravati district, thus bringing focus back to its core competence – textiles. In addition, it will expand its women apparel and update its apparel portfolio. And most importantly, it will focus on aggressive product-centric marketing so as to drive 17-18 percent annual growth over FY16-’18.

Sustained investments drive growth

Even though the year 2015-16 was challenging due to subdued consumer sentiments and tough global scenario, Raymond ended the year with good growth in revenue and profitability especially in the lifestyle business. All this was possible because of the company’s sustained investments in brands, expansion and modernisation in retail network coupled with operational efficiencies. Further, Singhania is clear that that he wouldn’t get into the e-commerce model that uses a brand’s products to drive traffic to the discount-oriented aggregator’s business.

Turning it all around to make profits

When Singhania took over the company from his father Vijaypath Singhania in 2000, he brought about several changes such as divestment of its loss-making steel and cement companies. He instead focused on textile manufacturing, apparel brands, men’s toiletries and prophylactics. Interestingly, he entered into joint ventures with international companies such as Gruppo Zambaiti of Italy to set up a greenfield facility to manufacture cotton and cotton linen shirting fabric at Kolhapur and with Belgian denim major UCO NV for manufacturing denim in India. The traditional textile business was restructured as a complete male grooming brand over the years. Today, the brand is synonymous with the best worsted fabrics and suitings.

Raymond has a built in capacity for manufacturing 41.5 million metres of suiting fabrics at its two plants at Vapi and Chinddwara. Its Kohlapur plant has a capacity of some 26 million metres of shirting a year and 44.5 million metres of denim at its Yavatmal unit.

Recently, Raymond was in the news over talks with foreign private equity funds KKR & Co and Blackstone to sell 20 per cent in its branded apparel business to fund expansion. It even appointed Citibank as investment banker for the deal. If the deal goes through, it will help expand the apparel business which faces stiff competition from Aditya Birla Group’s Madura Fashion and Arvind Lifestyle.

Raymond Group was incorporated in 1925 and today it is one of the largest branded fabric and fashion retailers in India. It owns brands such as Raymond, Raymond Premium Apparel, Park Avenue, Park Avenue Woman, ColorPlus and Parx. It has one of the largest network of over 700 retail shops across India and overseas, in 200 cities.