Fragrances & accessories division of Titan Co sees ‘greenshoots’ of demand recovery

Shobha Roy | Updated on November 24, 2020

Eyes taking fine fragrances range to beyond Big 25 cities, where it is currently concentrated

The Fragrances and Accessories division of Titan Company Ltd has been witnessing some “greenshoots” in terms of a pick-up in demand during the festival season. The recovery in Q3 (October-December quarter) is expected to be close to 65-70 per cent of a normal year as against around 40 per cent in the second quarter.

According to Manish Gupta, Associate Vice President & Chief Operating Officer, Accessories Division, Titan Company, while sales during the first quarter was muted, it has been improving on month-on-month basis for both its brands, Skinn and Fastrack.

Also read: Titan reports 37.8% drop in net profit for Q2

“Last year, we had clocked almost 2x the growth rate of the industry. We had been growing very well and had an ambitious plan for this year, and then Covid stuck. It has been challenging as discretionary spends have been worst-affected. First quarter sales were very small, but as the months are passing, our recovery rates in terms of Skinn and Fastrack brands have been improving, compared to some other categories within the company,” Gupta told BusinessLine.

The overall topline of the company, which includes divisions such as jewellery, eyewear, watches, and fragrances & accessories, recovered to about 89 per cent in Q2. Jewellery saw a recovery of around 98 per cent, watches 55 per cent, eyewear 65 per cent, and the fragrances division witnessed a recovery of about 50 per cent.

The division is expecting a “better recovery” in Q3 backed by a pick-up in demand during the festival season and improved recovery in sales from exclusive channels.

“In Q3, we should be 65-75 per cent of our sales in a normal year and are hoping to touch around 85-90 per cent in Q4. Accessories would be around 10-15 per cent lower than fragrances (in terms of recovery),” he said.

While fragrances account for nearly 60 per cent of sales under the division, accessories account for the remaining 40 per cent.

The rate of recovery has been different for various categories as well as at the channel level. While the company’s own retail channel has witnessed sales recover to the tune of 70 per cent, e-commerce has seen 100 per cent recovery. Recovery in general trade is around 40 per cent, while that in departmental stores is close to 50 per cent.

Also read: Online jewellery firms shine on festival cheer

“Our focus would be on maximising recovery and managing inventory and cash management,” he said.

Expanding reach, launching products

The fine fragrances industry, which is estimated to be worth about ₹2,000 crore, had been growing at around 12-13 per cent year-on-year before the pandemic. The penetration of fine fragrances in the country is less than 10 per cent, thereby presenting a huge opportunity for growth over the next five years, given the rise in disposable income and growing preference among the youth for fine fragrances.

Fine fragrances are still largely concentrated in the big 25 cities. The division plans to strengthen its reach in Tier III and Tier IV towns.

“Though, we are present in 221 towns through our exclusive stores of World of Titan and Fastrack stores. The current skew for fine fragrances is largely coming from the top 25 cities. We want to develop the next 20-25 cities and build relevance for fine fragrances,” he said.

The company is also looking to expand the Skinn portfolio by launching collections under the premium end, travel perfumes, and products in the unisex category.

Recently, the company launched the ‘Escapade’ range of perfumes for men under the Skinn brand. The collection is crafted by the finest master perfumers from France.

Published on November 24, 2020

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