Increased demand for winterwear, kidswear drives recoveries for V-Mart Retail

With increasing demand for winterwear and kidswear, mid-sized hypermart V-Mart Retail is witnessing “month-on-month” recoveries across stores in small towns.

Although sales are yet to reach pre-Covid levels, Diwali “saw a very good business” and H2 sales (October – March) are expected to be “much better” than the first half of the fiscal.

A report by Edelweiss Securities said, “the early part of Pujo was slightly weak” but Diwali sales “went by very strongly, especially in tier 2- 3 towns. The company continues to see very strong offtake across regions”. During the festival season last year, V-Mart went with ₹550 crore worth of inventory; while this year it went with ₹350 crore. But the company clocked similar sales.

Incidentally, the report said that recoveries are not consistent across regions and on an aggregate it is clocking 75-80 per cent of pre-Covid-19 revenues.

According to Vineet Jain, COO, V-Mart Retail, the company saw “sequential recoveries”. However, not just the festival demand, but early onset of winter and subsequent demand for related items like sweatshirts, hoodies, active wear, jackets and sweaters led to “increased activity among customers”. Good buys are happening in kidswear too. The marriage season is expected to be another demand driver.

“There is renewed activity in the market because of early onset of winters in the Hindi heartland and in North India — a core market for us. Eastern markets have recovered post Pujas driven by demand for winterwear. We saw a big rush for winter merchandise and kidswear; and were adequately stocked,” he told BusinessLine.

“Gradual shift is also happening from unorganised to organised players thereby leading to increased footfalls in V-Mart stores,” Jain added.

Rental renegotiations

Incidentally, sources say, V-Mart has already carried out rental renegotiations and these savings will be accounted for in Q3 (October –December) numbers. It had also closed down four unprofitable stores in the July-September period.

For V-Mart, apparel sales constitute nearly 80 per cent of its turnover with winterwear being the major draw. The company operates 272 stores, across upcountry markets, Tier-2, Tier-3 and Tier-4 towns and in some Tier-I cities.

The retailer will look at more store openings, each store being around 8,000 sq ft in size. New stores are being looked in places like Ranchi, Varanasi and in other tier-4 towns. Stores will be company-owned and company-operated.

“We are in a renewed investment phase and will actively look at new attractive locations. But, definitely from here onwards we are looking at adding more number of stores,” he said but did not specify the capex or exact number of stores that the company was looking to add.