V2 Retail, a listed value retailer with 135 stores largely in the north and east of India, plans to invest around Rs 120 crore this financial year (FY25) to set up 60 stores in new and existing markets, wholetime director Akash Agarwal said in an interaction with FE. The company is also eyeing an online presence by the third quarter of the current fiscal to provide an omnichannel experience to consumers. It is hoping to touch Rs 1,800 crore in topline in FY25 from Rs 1,165 crore reported in FY24.
New markets will include Maharashtra in the west and Andhra Pradesh in the south, Agarwal said, as the company eyes a broader footprint of 300-350 stores in the next 3 years. More new states are expected to be added in the coming years to its current list of 14 states, though the company will not take its eye off existing markets such as Bihar, Uttar Pradesh, Jharkhand, West Bengal and Odisha, where it has over 40% of its current store network.
“We have rolled out about 16 new outlets in the first five months of the current fiscal. Many of them have happened in our core existing markets, since we take a cluster approach to our business. However, newer markets are important from an expansion perspective. The remaining 44 stores are in the fitout stage. We hope to launch them within this financial year to meet our store addition target of 60 for the year. Some of them will also be new markets,” Agarwal said.
Agarwal also added the retailer would maintain a healthy store addition target of about 50-60 stores annually over the next three years, given that the value fashion market is booming.
India’s value retail market, excluding food and grocery, will surge to $170 billion by 2026 from $111 billion now, according to a recent report by Wazir Advisors. This segment is set to grow at a compounded annual growth rate (CAGR) of 15% between 2024 and 2026, surpassing the overall retail sector’s likely 10% CAGR, which is projected to reach $1,219 billion by FY26.
Agarwal points to growing consumer aspirations in small cities, driven by the use of social media for the surge in value retail. V2 Retail competes with Trent’s Zudio, Reliance Retail’s Yousta, Aditya Birla Fashion and Retail’s Style Up, and InTune by Shoppers Stop.
In FY24, Zudio opened a record 203 new stores and crossed the Rs 7,000 crore revenue mark. It will continue to add over 200 stores in the current financial year to maintain its growth momentum, company officials said.
While V2 Retail’s year-on-year revenue growth in FY24 was 39%, this number will surge to over 50%, if it does meet its objective of touching Rs 1,800 crore in turnover at the end of FY25, sector analysts said. Bottomline, they say, could improve as V2 Retail takes a cluster approach to expansion and looks to rationalise costs as it increasingly turns to an in-house design team for its production needs versus external designers. V2 Retail had returned to the black in FY24 with a profit after tax of Rs 27.8 crore compared with a loss of Rs 12.8 crore in FY23.