Shital Mehta, chief executive officer, Pantaloon Fashion Retail, said on Thursday the company has shut 54 Madura stores and one Pantaloons store in Q1FY18.
Aditya Birla Fashion and Retail is downsizing its retail chain of stores as a part of its restructuring exercise. Shital Mehta, chief executive officer, Pantaloon Fashion Retail, said on Thursday the company has shut 54 Madura stores and one Pantaloons store in Q1FY18. There are around 2,000 Madura and 213 Pantaloons stores operational in the country. “ABFRL will continue its focus to consolidate its operations in Madura and may shut few more stores in the coming quarter. It is an ongoing process and the consolidation was started last year. There will be some store closures in the next quarter before the operations stabilise. Pantaloons will not witness too many store closures maybe 1 or 2 non-performing stores will be shut in the financial year,” Mehta said on a post earnings conference call.
While the company plans to shut loss-making stores, it also plans to add 100 to 150 Madura stores and around 40 to 50 Pantaloons stores in FY18. As of June 30, the company has total debt of Rs 1,800 crore comapred to Rs 2,000 crore debt in Q1FY17. “Our debt may go back to Rs 1,900 crore to Rs 2,000 crore by the end of financial year as we plan to expand,” Mehta added.
Mehta said, GST has been rolled out across the value chain with minimal disruption to business. Final GST rates has been largely neutral for the industry as a whole with 5% tax (below Rs 1,000), 12% tax (above Rs 1,000) and 28% on leather accessories. “Organized value players have benefited from lower rates and we have cut rates in our Pantaloons stores by 2% to 3% on an average to pass on the benefits to our customers.” However, premium brands have been marginally impacted, Mehta said. In the first quarter of FY18, ABFRL reported a loss of Rs 20 crore compared to a loss of Rs 21 crore in Q1FY17. Revenues for the quarter rose 25% year-on-year to Rs 1,769 crore. The company’s Ebitda was up 7.8% year-on-year to Rs 82 crore.
The Ebitda margin in Q1FY18 was 4.6% compared to 5.4% in Q1FY17. ABFRL’s like-to-like growth was 14% in Q1FY18. Results for Q1FY17 did not incorporate the financials of F21 acquired in Q2FY17 and the newly launched Innerwear business, the company said. In the quarter, Lifestyle brands registered a revenue growth of 14% driven by the retail like-to-like growth of 21%. Ebitda of Lifestyle brands grew 17%.
Pantaloons continued its growth momentum with a revenue growth of 27% in Q1FY18 on a like-to-like growth of 14%. Pantaloons reported a 78% growth in Ebitda. Fast Fashion segment revenues tripled in Q1 due to addition of Forever 21; other businesses grew by 63%, the company said.