Dressing Up The World
Synonymous with high quality apparel for decades, Raymond has continued its golden run through frenetic store expansion
Photo Credit :
Sanjay Behl, CEO, Raymond Lifestyle
For Raymond Group 2018 has been phenomenal with all the core and strategic businesses outperforming stretched targets and industry peers. At the consolidated level, the homegrown branded fabric and fashion retailer recorded 12 per cent revenue growth at Rs 6,708 crore as well as 48 per cent jump in its net profit at Rs 171 crore. Raymond’s entire businesses of branded apparel, textiles and garments sustained high revenue and profit growth despite a very significant headwind on commodity pricing trends last year, especially wool, and currency depreciation impacting its raw material imports. Furthermore, the group’s performance on all the key fiscal parameters of operating margins, return of capital employed, return on equity, free cash flow and debt-equity metrics has exceeded investor guidance and expectations.
“The growth was in line with our expectations. The core lifestyle business crossed Rs 6,000 crore annualised revenue last year with operating profits in excess of Rs 600 crore. We expect the current financial year for our businesses to be even better than last year with double-digit revenue growth and a further improvement in operating margin by 70-100 bps. In 2020, the underlying ROCE will be at 15 per cent (doubled in last 3 years) and Raymond will be a free cashflow organisation. We are on track to add another 250 new brand stores across different formats and tier towns in FY20,” Sanjay Behl, CEO, Raymond Lifestyle said in response to queries from BW Businessworld.
The Mumbai-based group, which owns apparel brands like Raymond, Raymond Premium Apparel, Park Avenue, Park Avenue Woman, ColorPlus, has given a robust performance. “We are also remodeling the supply chain for all our existing businesses targeting to release Rs 250-300 crore additional cash flow over the next two years. More significantly, we have triggered an organisation-wide transition of our ERP backbone to the future-ready SAP-4 Hana and creation of next-generation phygital and omnichannel capability linkages in the front-end retail,” said Behl.
The year gone by also saw aggressive retail expansion by Raymond with 283 new exclusive stores opening which is highest in a single year in its 94-year history.
Over the last six quarters, it has added 300 new mini Raymond stores, thereby extending its ‘The Raymond Shop’ (TRS) reach to over 600 unique towns. The scale and pace of new store expansion over the last 18 months is amongst the fastest retail rollout achieved by any company, not just in India but anywhere in the world.
“As part of ‘Raymond Reimagined’ vision, the group has purposefully invested in evolving its brand proposition and pivot every single node of organisational value chain on customer centricity. Recently, we launched 15 MTM stores inside Macy’s across the US and soon will be expanding our footprint with Macy’s and other retailers global,” Behl informed.
Meanwhile, Raymond’s linen unit in Amravati commenced operations in April 2018. The other greenfield factory commissioned in June 2017 in Ethiopia for manufacturing menswear suit, jackets and trousers for the US and European markets shipped 0.5 million garments to global customers with nil quality defects. With phased capacity augmentation and enhanced efficiencies, the company will be servicing orders for over 1 million garments to its global customers from this facility over in the current financial year.