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Textile company Raymond has pegged its capital expenditure for the current fiscal at ₹250 crore, besides setting aside ₹30 crore towards media spends.
Apart from giving facelifts to its stand-alone stores ColorPlus and Park Avenue, the company has unleashed ads for its largest selling menswear brand, Park Avenue.
“We feel the need to increase investment in marketing, both towards spends on media and on renovating our showrooms to increase the retail footprint,” said Sanjay Behl, CEO, Lifestyle, Raymond, while addressing an analyst meet. “In branded apparel, we are looking at doubling our margins between 8-11 per cent, which should be a reasonable benchmark after attaining critical mass and market share.”
The company is now planning to reduce its seasonal discount period to derive better margins.
The CEO added that the industry is getting together to have shorter cycles.
Even though wool prices have declined, the company has not been able to pass on the benefits to customers, as the landed cost of the commodity has increased due to the appreciating rupee.
“We are seeking a better hedging portfolio, and will be stocking the commodity wherever it is required. Going forward, we are looking at a realistic assumption of 15 per cent growth in textiles,” said Behl.
Raymond’s fabric portfolio is also expected to get a boost from its made-to-measure (MTM) business, as the same fabrics would be converted for its tailoring operations.
“We are increasing our garmenting capacity since there is expansion happening in the MTM business. This is going to lead to an upside in the garment portfolio,” added Behl. The company is also trying to position its textile portfolio as an ‘all weather wear’ to decrease the seasonality factor in its portfolio.
“We want to make our textiles not just winter-oriented, as the portfolio should not be dependent on seasonality, and there are ventilated fabrics in our portfolio,” added Behl.
Raymond is also trying to push its shirting fabrics which are not season-dependent unlike worsted suiting.
It’s now seeking a better price value equation and upgrading its product range to sustain its margins in the business.
The textile company has been improving its cost-and-supply chain efficiencies by relocating its manufacturing facilities for ColorPlus from Chennai to Mumbai.
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