V-Mart Retail has witnessed an upsurge in sales in recent months with the onset of festivities.
Value fashion retailers such as V-Mart Retail, Cantabil Retail are expecting a bumper festive season, which could even see sales surpass the pre-COVID levels, top executives of the companies told Moneycontrol.
“The sales have picked up quite strongly and the sales in July was our highest-ever. August is also witnessing a strong momentum and we expect it to continue in October and November and we might even cross our pre-COVID festive sales,” said Shivendra Nigam, Chief Financial Officer, Cantabil Retail.
V-Mart Retail has witnessed an upsurge in sales in recent months with the onset of festivities. According to Vineet Jain, COO, V-Mart Retail, the company clocked good business during Rakshabandhan in August and the outlook for the festive season is positive. Its same-store-sales growth stood at 90 percent of the pre-COVID levels in July and August.
Both the companies clock about 35-40 percent of the sales overall sales of the year during the festive months. Value fashion retailers get more than 75 percent of their business from tier II and beyond towns and their average ticket size ideally is below Rs 700. V-Mart Retail, operates 282 stores in the country, mostly in Northern and Eastern India. Over 75 percent of its stores are in tier II and beyond. The company had recently acquired 74 stores of retail brand Unlimited from Arvind Lifestyle Brands in South and West India. Cantabil Retail has over 300 stores in the country.
A recent report by Kearney had projected that value fashion retail is slated to be a $215 billion market by 2030, driven by households earning less than Rs 10 lakh per annum, and predominantly from Tier II and beyond cities.
On the track of recovery
V-Mart Retail and Cantabil Retail had reported a washout first quarter due to the impact of the pandemic. V-Mart had reported a 49 percent decline in its revenues, sequentially, for the first quarter ended June. It had reported Rs 356 crore in revenues in Q4 FY21 as compared to Rs 182 crore in Q1 FY22. While its year-on-year (YoY) revenue saw an uptick, that was largely on account of the low base, which again was a complete washout due to nationwide lockdown imposed after the first wave struck the country.
Cantabil Retail India’s revenue in Q1 of FY22 declined 69 percent quarter-on-quarter to Rs 28.7 crore as compared to Rs 95 crore in Q4, FY21. It reported 124.5 percent YoY growth over Rs 12.8 crore clocked in revenue last year.
However, after suffering a heavy blow from the second wave of the pandemic, like most retailers, both the companies have pinned hopes on the festive season, and rightfully so. According to a recent survey by the Retailers Association of India, retail sales recovered to as much as 88 percent of the pre-pandemic levels in the country aided by festive shopping.
The findings of the survey showed that retail businesses in North and South India are almost back to the pre-pandemic levels in August 2021 with sales at 98 percent and 97 percent (of the pre-Covid times), respectively. While West and East of India are looking hopeful of recovery in the next few months with current sales at 76 percent and 81 percent of pre-pandemic levels (August 2019).