Rekha Jhunjhunwala-backed Baazar Style Retail is confident of sustaining the current CAGR growth rate and hopes to improve on the margin, compared to FY24 levels.
Earlier, shares of Baazar Style perked up after a quiet debut, notching up a 8 percent gain in early trade.
Read More: Shares of Baazar Style rise after a flat debut
In a conversation with CNBC-TV18, Pradeep Kumar Agarwal of Baazar Style Retail said they are confident of improving on the margin and working capital cycle. The company is looking to ramp up the private label business where the margins are better than the regular labels, Agarwal said. The company has ten private labels and plans to launch more in the coming quarters.
Retail peers have aimed to to increase their share of private labels, with V-Mart registering a share of 45-48% of private labels in overall revenue for FY23, while V2 Retail's private labels clocked a share of 40%. In contrast, Style Baazar’s share of private labels stood at 31% for the same period. The retailer's revenue from private labels have risen at a faster CAGR of 88.76% betwen FY21-23, the company had said.
Read More: Baazar Style Retail IPO: Does this retailer offer value to investors?
An assessment by Technopak projects the share of organised retail in the overall pie is expected to rise to nearly 23 percent by FY27, from the current 15 percent. In absolute terms, this contribution presently stands at Rs 12 lakh crore, and is likely to reach Rs 26 lakh crore by FY27.
The company claims to have a strong control over its retail value chain, which it considers as a key ingredient for the success of the value retail format.
Key Organised Brick and Mortar Retailers
| Player | FY23 Revenue (Rs Cr) |
| Style Baazar | 787.9 |
| V2 Retail | 838.9 |
| V Mart | 2464.8 |
Baazar Style said it has been focusing on Tier 3 and 4 cities, to unlock the consumption potential. Currently, approximately 23% of the total demand for apparel comes from these cities, said Baazar Style, adding that roughly 60% of this demand is currently within the value segment. The management has positioned its ability to deliver quality products at affordable prices as an important factor for a wide acceptance of the brand.
Baazar Style's key shareholders include investors like Rekha Jhunjhunwala, wife of late Rakesh Jhunjhunwala, Kewal Kiran Clothing, promoter of Haldiram Snacks - Manohar Lal Agarwal, family office of Supreme Industries, among others.
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