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COVID-19 impact: Arvind Fashions looks to reinvent denim

Denim which was the go-to fabric has been shunned by customers. He also agreed that sales of denim for the company has been ‘pretty low.’

August 04, 2020 / 05:49 PM IST
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The new work-from-home reality has rapidly recalibrated the fashion code for professional wear. With more work calls and team meetings now taking place from the comfort of home, office wear has become decidedly more relaxed.

According to retailers, consumers are gravitating to a more relaxed work look. People are pairing shorts, yoga pants, or track pants with more professional looking tops for video calls.

Sensing the demand for comfort wear, Flying Machine, one of the well-known denim jeans brands of Arvind Fashions Ltd (AFL) did not want to lose out on this opportunity.

Hence, they are planning to ‘reinvent’ denim jeans. “We will reinvent and make sure denim is not lost,” J.Suresh, Managing Director and Chief Executive Officer, Arvind Fashions Ltd told Moneycontrol in a candid chat adding that the company wants to make denim lighter and comfortable like joggers.

“It will be a combination of denim and comfort wear,” Suresh added.

Jeans pants, which are made from denim or dungaree cloth, was the go-to fabric for both men and women, for all seasons and occasions. It has been the ultimate comfort in casual wear; but the coronavirus pandemic has changed all that.


Suresh indicated that denim which was the go-to fabric has been shunned by customers. He also agreed that sales of denim for the company has been ‘pretty low.’

However, he sounded optimistic about the pick up in sales of denim once it’s reinvented.

When asked on the pricing Suresh said, “Flying Machine jeans price in India falls in an affordable bracket.”

How are other brands faring?

Arvind Fashions Ltd (AFL) is home to over 27 distinguished brands such as Aeropostale, Calvin Klein, US Polo, Tommy Hilfiger, GAP, among others.

It has a network of 1,290 stores and a presence across India.

Suresh said that casual wear such as T-shirts, loungewear pants, joggers have witnessed robust demand.

“We have seen strong demand for T-shirts which are sold by Tommy Hilfiger and US Polo. We are going strong in terms of both omni and digital.”

On the question of the demand after Unlock 1.0 and 2.0, Suresh said it was a slow start for the company but sales picked up with the online platform.

“The first month after opening up it was very slow but post that our comfort wears such as T-shirts, loungewear pants have done extremely well. In comfort wear, we have seen 2x, 3x kind of growth,” he said adding that their sales have touched 20 percent of Pre-Covid levels.

He believes the trend of comfort wear will continue and the company’s portfolio is ‘well placed’ for the future.

What about shirts?

Suresh expressed concern that sales of shirts are yet to pick up despite work from home.

However, the company is hinging hopes on the new anti-viral fabric shirts to turn around the fortunes.

In June this year, Arvind Ltd, the parent of Arvind Fashions partnered with Swiss textile innovation major HeiQ Materials AG for manufacturing anti-viral fabric and garments.

HeiQ Viroblock is one of the most advanced global antiviral products created by HeiQ, which significantly enhances the antiviral log reduction and reduces viral infectivity by 99.99 percent.

Going ahead

Suresh is eyeing festive season for a pick up in demand however, he was quick to add that ‘normalcy in sales will come but not completely.’

He said factors such as job losses and salary cuts may hamper the shopping during the festive season.

“We are not going to get growth immediately as it is not going to be a buoyant time due to erosion in income but we believe that 60-70 percent of normalcy in sales will come back during festivals,” said Suresh.

Cash is King

During these unprecedented times, Arvind Fashions has put in place a comprehensive cost management plan that covers a significant reduction in costs during the lockdown period and until sales normalize.

When required, the company is utilising its reserves to cash in on the new trends.

“We have improved our profitability with cost control. So, now we are being able to cash in on the new trend which is emerging of top wear fashion,” Suresh said.

AFL reported a consolidated net loss of Rs 208.12 crore for the quarter ended March 2020, impacted by COVID-19 outbreak and subsequent disruptions in the market. The company is yet to announce its earnings for Apr-June FY21.

When asked how the company has performed in the April-June quarter, Suresh said the company has seen a lot of ups and downs in the first quarter as April and May shops and malls were completely shut due to the lockdown and June the demand for clothes remained subdued.

Giving an update, Arvind Fashions on Aug 2 in a statement sent to exchanges said “With the outbreak of Covid-19, while footfalls had started getting impacted from early March, malls were already being asked to close by mid-March, a complete lockdown implemented across the country starting March 25, this led to full shutdown of the store network, offices and warehouses. These developments have had a significant adverse impact on revenue and profitability for Q4.”

Currently, 75 percent of Arvind Fashions stores are operational, though footfalls and revenue remain well below pre-COVID-19 levels.

Himadri Buch
first published: Aug 4, 2020 05:34 pm
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