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Last Updated : Feb 05, 2018 02:18 PM IST | Source: Moneycontrol.com

Aditya Birla Fashion cuts costs in Forever21 on slowing sales

Ashish Dikshit, managing director of ABFRL’s Madura Lifestyle business said in an investor call on Friday that Forever21 took a one-time inventory hit and the net sales value were impacted by the changes in Goods and Services Tax (GST) rates.

 
 
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The Indian licensee of US fashion brand Forever21, Aditya Birla Fashion and Retail (ABFRL), has decided to downsize its stores and cut costs due to decline in the fast fashion business, reports Mint.

The company reported a loss of Rs 23 crore for the December 2017 quarter in the fast fashion business as sales from the business declined 14 percent from a year ago period to Rs 114 crore.

Ashish Dikshit, managing director of ABFRL’s Madura Lifestyle business said in an investor call on Friday that Forever21 took a one-time inventory hit and the net sales value were impacted by the changes in Goods and Services Tax (GST) rates.

The report said that company is working on restructuring the Forever21 business in terms of store resizing, renegotiations and new store model with the change in business climate.

ABFRL has acquired the Indian licence for Forever21 from DLF Brands and Diana Retail, the previous partners of US fashion brand.

The company currently has 22 stores and reduced the size of its old stores. ABFRL is looking to operate smaller stores and plans to open 6-8 stores in a year going forward.

Forever21 competes with the likes of Zara and H&M in the fast fashion business segment in India which reported a very healthy business in the country. They operate stores in the size of 25,000 to 50,000 square feet around the world and in India.

The company expects business to turn around by next quarter aided by the double-digit growth in fast fashion business.
First Published on Feb 5, 2018 02:18 pm
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