E-commerce, stationery, perfumes to boost growth: Archies

Greeting card maker Archies reported a subdued June quarter with revenues growing 7.9 percent to Rs 41.2 crore. Mass stationery and perfume segments boosted growth, Raghav Moolchandani, Business Development of Archies told CNBC-TV18, adding this trend would continue going forward as well. Margins expanded 100 basis points to 2.9 percent and the company turned corner with a net profit of Rs 21 lakh in June quarter against a Rs 83 lakh-loss a year ago.Archies had a subdued growth in last few years due to teh rapid changes in the market and a late entry into the e-commerce segment.Moolchandani said the company’s transition phase is over and growth will happen hereon. Lower rents due to consolidation in certain areas aided margin growth as well, he said. Going forward the company is looking at strategic tie-ups to develop its products segment, Moolchandani said adding that e-commerce, the fastest growing segment, will start contributing 3-4 percent to revenues by this year end. Below is the transcript of Raghav Moolchandani's interview with Latha Venkatesh & Nigel D’Souza on CNBC-TV18. Latha: Tell us this turnaround story, what led to it?A: Comparing to last year’s quarter, we had a lot to cover up and a few of our segments which we had entered - the mass stationery segment and the perfume segment did really well for us. Our corporate stores were performing better and at the same time, e-commerce has also given us quite a boost over the quarter. Overall company is really happy with the performance and we really hope to keep this consistent over the years. The transition phase is over - well this is what we were talking about. It is over and this is how we are going to keep on growing. Specifically, the stationery and perfumes in the mass segment have really given us a boost and improved our sales.Nigel: Let’s talk about your margins then. There is so much of talk about e-commerce. I was looking at one of your data points - your rent in fact is lower by close to around three percent. Is it because of the increased focus on e-commerce or is it because rent rates are falling?A: We have actually consolidated from a few more facilities to our main facility therefore reducing the rent from those areas. We have renegotiated certain deals in our current running retail stores and gone under different forms of negotiation. So, that has really helped. It has nothing to do as of right now with e-commerce in terms of rental reduction.