Arvind Ltd expects nearly all brands to turn profitable next year
Arvind Ltd earned Rs2,717.97 crore in total consolidated revenue in the fiscal third quarter that ended December, an increase of 15.8% on a year-ago basis
Bengaluru: Textile maker Arvind Ltd expects nearly all brands in its branded apparel business segment to turn profitable next year, company executives said on a conference call with analysts on Wednesday.
Over 35% of the company’s quarterly revenue comes from the sales of brands like Arrow, Flying Machine, Calvin Klein, Tommy Hilfiger, Aeropostale and Gap, among others. The branded apparel segment earned Rs957.64 crore in revenue in the quarter that ended 31 December, a year-on-year jump of 23.6%.
“We’ve had a very good quarter in improving profitability because the focus is now on that. It is not just the power brands which have given improved profitability. We’ve improved profits on Unlimited as well as specialty retail and some of the emerging brands,” J. Suresh, managing director and chief executive officer of Arvind Lifestyle Brands Ltd said on the call. Unlimited is the company’s family fashion chain of stores.
Arvind Ltd earned Rs2,717.97 crore in total consolidated revenue in the fiscal third quarter that ended December, an increase of 15.8% on a year-ago basis. Net profit rose 8.03% to Rs79.09 crore during the period, the company reported on Wednesday. Third quarter revenue at Arvind’s textile business segment, its mainstay, grew 9.41% to Rs1,534.43 crore.
“We will end the year with two to three brands being negative (two specialty and one emerging brand). But next year all brands will be positive in terms of profitability,” said Jayesh Shah, chief financial officer of Arvind. All emerging brands will turn close to break-even by Q4, Suresh added, without mentioning brand names.
The company has also worked with US-based casual wear brand, Gap, to start production of the label in India. Forty percent of the Gap products that Arvind sells in India will be produced within the country and the target is to take that to 80% by the end of this year, executives said.
Arvind has also got approval from the US brand to tailor some part of its locally produced Gap merchandise to Indian requirements, which it expects will give a big boost to improving store productivity.
As of 31 December, Arvind had 1,137 stores across brands, 93 Unlimited stores and 32 specialty retail stores.
The company now expects revenue in its branded apparel business to grow 15-17% for 2017-18. It expects revenue in the textile business segment to grow 6-7% and overall revenue growth of 11-12% for the year.
