Expect business to be back to normal by August: Arvind Fashions

Bengaluru: Arvind Fashions Limited (AFL), which runs stores of Calvin Klein, Tommy Hilfiger and Sephora, said the country’s fashion retail segment should fully recover only by mid-year, paced by the vaccination drive.

To be sure, the retailer had reported robust sales during the festive period – from Dussehra through the winter.

“The launch of fall season collection in August is when business would be back to normal, led by the ongoing vaccination drive,” said Shailesh Chaturvedi, who was appointed chief executive of AFL earlier this month. “The fashion business is completely linked to social interaction driven by consumers visiting malls, department stores and flagship stores. We have already achieved 80% recovery September onwards. It is a fair assumption that six months from now, things will sort out as the fear of going to crowded places will fade with vaccination.”

Fashion was one of the worst-hit segments by the lockdowns and retailers continue to grapple with low footfalls in high-street stores and malls despite easing curbs. In a bid to cut losses, AFL pruned its portfolio of brands and exited some, including Gap, The Children’s Place and Hanes. In July, Walmart-owned Flipkart had picked up about 27% stake in AFL’s newly formed subsidiary Arvind Youth Brands, which owns denim label Flying Machine.

To strengthen its balance sheet this year, AFL recently announced its plans to raise Rs 200 crore in a rights issue.

“We need funds as growth in the business will be sharp and rapid compared to last year. The growth funds may also help reduce our debt,” said Chaturvedi.

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Chaturvedi’s mandate from parent company Arvind Ltd is to focus on its six core brands – Calvin Klein, Tommy Hilfiger, US Polo Assn, Arrow, Flying Machine and cosmetic chain Sephora.

Adjacent categories of these brands will also gain focus this year. “Inner-wear and footwear divisions were on the growth path in the third quarter. Children’s wear of Tommy Hilfiger and US Polo Assn will be given scale,” said Chaturvedi. “In the Covid world, we need to look at existing portfolio instead of adding new brands.”

In the third quarter ended December, the Bengaluru-based retailer registered 106% sequential growth driven by festivals, winter sales and online shopping. “Our ecommerce business recorded 230% growth over last year and now contributes to 20% of our business,” Chaturvedi said.

AFL, owned by Ahmedabad-based textile manufacturer Arvind Ltd, started operations in 1993. Currently, the BSE-listed company is present through 1,200 exclusive brand outlets, 14,000 multi-brand outlets and 3,400 large format stores.


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