Since the pandemic began, there is a significant change in consumer behaviour with an accelerated shift towards “casualisation and a high degree of digital adoption, making these changes the new normal in the future, said India’s leading casual and denim player Arvind Fashions Limited (AFL). It has made the e-commerce channels extremely prominent and more relevant than ever, said AFL Chairman Sanjay Lalbhai, while addressing in its latest annual report of the company.
AFL, which has a portfolio of six strong brands – US Polo Assn., Tommy Hilfiger, Calvin Klein, Arrow, Flying Machine and Sephora – is well-poised to capitalise on the new consumer behaviour with its digital ecosystem and “right for online” casual brands, Lalbhai added. “In summary, with a focused portfolio of six strong brands and significant omni-ecosystem capabilities, your company is in a strong position to leverage the opportunities available in the new post-pandemic world, where consumer buying behaviour is strongly moving towards direct to consumer channels,” he said.
According to the company, with flexi working practices in the post-pandemic world, the consumers” share of wardrobe is becoming more casual wear and athleisure oriented. “Within casual activewear and T-shirts have shown promising growth with CAGR of 12.7 per cent and 10 per cent, respectively, owing to changing preferences,” the report said. Moreover, small towns as tier II, III and below is also warming up to the idea of ready to wear branded apparel.
“Reverse migration during COVID-19 has only accelerated the adoption of branded wear. The Indian middle-class consumer in these locations is seeking quality, fashion at affordable price,” it added. According to Lalbhai, with a low fixed cost structure and working capital optimisation, AFL is now a more capital-efficient organisation, he added.
“Moving forward we will invest behind our high-conviction brands and ensure that we significantly enhance our profitability and return ratios in the years to come,” Lalbhai added. On its beauty retailing store Sephora, Lalbhai said: “With scaling up of omni-competence, we believe that Sephora is ready to outpace the growing beauty market in India.” AFL has been an early adopter of digital with a deep focus on omni-channel capabilities even before the onset of COVID, he added.
“We were able to further scale up our digital and omni play by extending our marketplace integrations with all large e-commerce players,” he said, adding that the company further strengthened its e-commerce fulfilment capabilities with 5 dedicated B2C warehouses with capacity to service up to 30,000 orders per day, thereby reducing the delivery time for customers.
Earlier this week, AFL had announced to raise Rs 439 crore from various marquee investors including promoters by issuing equity shares of the company. Last month, AFL had sold its ”Unlimited’ retail chain to Value fashion retailer V-Mart Retail for an estimated Rs 150 crore in an all-cash transaction. For the financial year ended on March 31, 2021, AFL’s revenue from the operation on a consolidated basis was at Rs 2,201.18 crore. It was Rs 3,613.57 crore in FY 2019-20.