Companies

VMart is targeting 20-25% growth annually: Lalit Agarwal

Forum Gandhi Mumbai | Updated on July 24, 2021

Newly acquired Unlimited brand will be merged with VMart by January

VMart, which recently acquired 74 stores of Unlimited brand of Arvind Fashions, is bullish on achieving its pre-Covid level sales by the festive period. Speaking to BusinessLine, Lalit Agarwal, CMD of the retail chain said that VMart plans to achieve at least 20-25 per cent growth annually.

What is the rationale behind the acquisition of Unlimited ?

Vmart largely is a cluster player, we operated in Northern India and we didn’t have presence in Southern India, so we thought it was a great opportunity to tap the market. The culture matched with our brand, and the income level is also at par with our price point. The acquisition helps us reach 74 places at one go because Unlimited has that reach. We also have a skilled team which will help us penetrate into the market better. Otherwise, it would have taken us at least two to three years to reach this level. So, we are not paying anything extra on marketing at the moment, because the brand is already built up. It will also give us a jump start to enter other small towns as well.

What is VMart’s plan for Unlimited for the fiscal ahead?

We will continue to operate the brand for now. We want to be ready with the transition before the festive period. We will change the brand name gradually, and submerge it into VMart as we want to have a synergy across India. By January, we will have VMart’s product line merge with the current line at Unlimited.

What is the revenue you’re looking at over the fiscal?

We will try to achieve at least what Unlimited was earning in 2019 which was over ₹500 crore so that we are able to justify the acquisition.

Given the current scenario, what is VMart’s fiscal goal?

We are aiming to get a 20-25 per cent growth each fiscal, we are at par with that expectation. In terms of our expansion, too, we plan to open at least 35 stores, and we are at par with that too.

Several big fashion players have acquired smaller brands, what according to you is leading this trend?

The philosophy is about consumerism and consumption. The industry and we too, expect the consumption to rise. Players are in a competition to get to their customer first and faster. The players which are in a better position financially are looking at reaching closer to their customers, and this is a good time for them to shop for brands at a better price. If a company is able to take the short-term losses on their books, they will shop for more brands to expand. Our motive to acquire was agnostic of this trend because we wanted to enter the market and it was not a stressed acquisition.

Have your marketing budgets come back to pre-Covid?

Wherever we have expanded, we will have to market. Overall, our marketing spends will increase closer to the festive period. Any way our marketing budgets are low, they are yet to reach pre-Covid levels, but it is soon to come back to pre-Covid levels before the festive period.

When do you see the pre-Covid level recovery in the fashion apparel segment?

The comeback post the second wave has been pretty good. We expect normalcy to come back by the festive period. Gradually, territories are opening up. We have reached 80 per cent of our pre-Covid-level sales and we shall achieve 100 per cent by the festive period in October.

Published on July 24, 2021

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