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We Are On Way to Achieve Our Target of Rs 1,000 Crore: Deepak Bansal, Director, Cantabil Retail India
Listed on the BSE, Cantabil Retail India is in the business of designing, manufacturing, branding and retailing of apparel since 2000. It aims to become India’s best integrated apparel company and quadruple its sales to Rs 1,000 crore within next 60 months. Deepak Bansal, Director, Cantabil Retail India shares his plans with Ashish Sinha of BW Businessworld on how exactly he would do that and more. Excerpts:
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Are there any changes in the consumption trend that you have seen lately?
Major changes in consumption trends have been witnessed in the past few years. Consumer behaviour has been changing rapidly. Nowadays, consumers are more capricious, and they have less time but are more conscientious and prefer experiences over products. Moreover, the Covid-19 pandemic has also changed the world as we already have seen it. There is no denying the fact that the pandemic led lockdowns affected the cash flows of businesses and revenues are lower due to high proportion of fixed expense. However, we witnessed better-than-expected demand and recovery in the second half of the financial year due to the opening of the economy.
Talk us through your expansion plans and targets?
The company has a strong focus on expanding its retail footprint and opening 5-6 stores every month. The company’s plan in the last 3 years to expand in Tier-2 and Tier-3 cities and beyond along with Tier-1 cities has proven a great success and we will keep on expanding our proven growth story.
For the next phase of development, the company is planning to invest heavily in Tier-2 and Tier-3 markets. There is a significant increase in awareness about fashion trends amongst the people in smaller towns and cities, and hence we see immense potential in Tier-2 and Tier-3 markets for our expansion. The company is targeting Maharashtra, Gujarat, Rajasthan, Uttar Pradesh, Madhya Pradesh, Bihar, Jharkhand, West Bengal and parts of the North East for new outlets. As of FY21, Cantabil is present in 18 states with 336 stores in total. We are also very hopeful to add one more successful chapter in our new ecommerce venture as contributor in our top line to achieve our overall target to reach Rs 1,000 crore turnover in the next five years.
How was FY2020-21 for Cantabil? How was the festive period for the company?
I am happy to share that despite all challenges posed by Covid-19, our company recorded sales of Rs 251.64 crore in FY2021 with EBITDA margins (w/o IND-AS 116) of 13.97 per cent and PAT (w/o IND-AS 116) of Rs 17.86 crore. During the year the company repaid its entire term loan and today stands at minimum borrowing level.
The festive sales have been positive for the brand, and we have managed to match the pre-pandemic figures this year. This has been possible because of the sustained efforts by the brand, where our focus has been to provide the best products across categories, the consumer confidence shaping back, and promotional offers, all of which have positively contributed towards the recovery of sales for the brand. There is no reduction in market spending. In fact, it has increased due increase in volume.
Sustainability is the new approach for brands these days. What’s your take on it?
With the growing consciousness towards saving Mother Nature, most brands are trying to shift their attention towards sustainability. Fast fashion is soon going to become history. Hence, brands across categories are trying to redesign their offerings in a way that they can be as close to being as sustainable as possible.
The millennial and Gen Z buyers are the more conscious ones and they are completely shifting their approach towards sustainability. For this, the fashion industry across the globe is moving towards sustainable ways to thrive in the market. The brands are adopting conscious sustainable practices in a way to not only attract a loyal customer base but also showcase their responsibility towards the environment. Here at Cantabil, with our mission to be an ethical, transparent and responsible Indian organisation, we have designed and further aligned our marketing strategy in a way so that sustainable growth can be achieved. We have an excellent percentage of repeat customers which is building a very strong foundation for growth.
What are your marketing strategies for 2022?
The pandemic has truly changed the way we function, and now innovation has become the key to survival. New age strategies need to be adopted and stepped up to sustain the growth in the market. At Cantabil, we have been on the path of innovation to overcome the challenges induced by Covid-19. We are focusing heavily on providing the best-in-class shopping experience both in-store and in the online space. We are moving towards targeted, customized cross-channel engagement for our consumers thereby offering innovative experiences to keep the consumer connected for long. The focus of the brand is to offer an enriching experience that is integrated with the consumers’ tastes, needs, and preferences.
How has the garment manufacturing and retail industry changed over the years? What are the current trends in consumer behaviour?
The pace at which the industry has been undergoing change in the wake of the pandemic is unprecedented. Today, it is at a whole different level. The current trends include making big investments in omnichannel retail strategies. According to research, a digital consumer on an average owns 3.64 connected devices, and habitually consults these devices before making a purchase. Consumers are going for the seamless buying experience across multiple touch-points including both digital and physical stores. Another very interesting trends is personalization. Personalized shopping experience has become increasingly important to consumers, and in the retail world it often involves retailers giving consumers suggestions based on their previous searches, location, and order history. With the help of simple services, retailers also create personalized experiences for the consumers.
Next is the ease of tapping into new markets and channels. With the help of technology, it has become easier for retailers to tap into international and emerging markets, which otherwise would not be much feasible to approach. Retailers are now able to transcend set locations or markets and are now even able to expand their operations across the world, just by following an effective strategy.
The retail space is seeing an offline versus online battle. What will you prefer?
We cannot stress enough on the fact that the next phase of Indian retail evolution will majorly ride on the convergence of online and traditional channels, a digitally-enabled ecosystem, and the rising preference for digital platforms among consumers. The emergence of (O+O) market is seen as a tasteful blend of digitally enabled retail stores, which include neighbourhood kirana, as well as modern trade stores, along with etail, and it is likely to be a significant sales driver in the coming times.
In fact, according to Retail 4.0, by 2030, O+O-enabled sales is expected to touch the $640-billion mark, with digitally enabled retail contributing 43 per cent to the overall retail pie. If this pattern continues, as soon as the O+O retail model matures, both online and offline retailers will digitise point-of-sale (PoS), in-store operations, and inventory tracking.
Overall, the point is, it is important for any retail brand to be available and visible in both online and offline formats. It is high time that retail brands take the omnichannel approach to stay relevant and thrive in this age. Understanding the changing space, we also entered the ecommerce market to provide consumers with a holistic shopping experience along with our strong retail presence offline.