Fabindia crosses Rs 1,000 crore in sales

Sagar Malviya, The Economic Times
Mumbai, 19 January 2016

Fabindia Overseas has crossed Rs 1,000-crore sales mark to become the largest retail apparel brand in the country, significantly ahead of nearest rivals Zara and Levi’s India.
During 2014-15, the ethnic wear firm posted a 12% rise in consolidated sales at Rs 1,148 crore with 36% increase in profit before exceptional items at Rs 112 crore. Its domestic business grew 25% to touch Rs 767 crore ahead of largest fast-fashion brand Zara that clocked sales of Rs 720 crore during the same period.
"Customers are moving to one of two responses to retail. Either they are responding to products as commodities, or investing in curated products and experiences. We will continue to focus on the quality of our design and curation," said William Bissell, managing director at Fabindia, which runs more than 205 stores in India. The company also attributes its success to a policy of no discounting and instead build a sustainable cash flow.
Founded in 1960 by Bissell’s father John Bissell to market craft traditions of India, Fabindia started out as a company exporting home furnishings. The first retail store was opened in Greater Kailash, New Delhi, 15 years later. In mid 1990s, William Bissell took over the company.

The company added the non-textile range in 2000, while organic foods and personal care products were launched nearly a decade ago. Experts said the brand, which has expanded its portfolio over the years, has been finding acceptance among younger consumers since the last decade, a new development in a category earlier largely restricted to older buyers.
"The brand has been consistent to its core and they have been adding newer categories to remain relevant and also earn higher margins," said Devangshu Dutta, chief executive at retail consultancy Third Eyesight. "The challenge is to continue the momentum since their sourcing is dependent on thousands of craftsmen instead of a few large manufacturing units."
Ethnic wear, a segment still mostly fed by the unorganised segment, has been growing at an average of more than 10% a year over the last decade.

Leading department chains such as Shoppers Stop, Lifestyle and Westside are increasing the width of their private label range and offer contemporary styling in the ethnic space, fuelling growth. The ethnic wear segment is also seeing a lot of aggressive expansion from newer players both in online and brick-and-mortar space, something that could hurt Fabindia’s growth prospect going forward. For instance, Kolkata based Manyavar, which had just one store till 2008, has more than 400 stores across the country now and is expanding its portfolio from wedding and special occasions to everyday clothing.

Fabindia, in comparison, opened eight stores last fiscal and has added 14 doors in the current financial year. ET, last month, reported that the private equity arm of Louis Vuitton Moet Hennessy (LVMH), plans to sell its 8% stake in Fabindia.

(Published in The Economic Times)