Nissan Joseph Chief Executive Officer (CEO) of Metro Brands said that FY25 will be about re-positioning the brand and FY26 will see an acceleration in growth. In an interview with CNBC-TV18 Joseph also talked about the impact of premiumisation in the footwear space.
The CEO talked about the performance of premium brands such as J Fontini, DaVinci, Crocs and Skechers and said that rising middle-class incomes are encouraging people to buy shoes in this category.
Also Read: Metro Brands shares decline after shrink in Q3 operating profit margin
"I think what we've seen in that (premium) category if you look at our sales of shoes over Rs 3,000 that has grown from 44 percent in Q1 up to 48 percent in Q2 and we're seeing a lot of demand for premium products not only because people are becoming shoe collectors, but also because middle-class incomes are rising, disposable income is rising people see that there are good things that they can afford," Joseph said.
He added that consumers are also beginning to see value in purchasing premium footwear as it looks good and lasts long.
"They (consumers) are starting to see the value in these products. If you invest in a pair of shoes not only do you feel good wearing it and look good wearing it but it also lasts you an equivalent proportion of time longer," Joseph said.
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The CEO said similar trends are not being seen in the economy segment of footwear.
"We are seeing a lot of good moves on the premium side at the same time I think there's an overall sentiment that it is not as robust in the economy segment. Even in our walkway business, the premium segment is going on with a lot of tailwinds," he added.
Joseph talked at length about the company's vision and its effect on revenue and profitability in the coming fiscal year.
"We're playing for the next decade and the decade after that at Metro brand. We see that continuing to be dilutive to our earnings going through the entire fiscal year this year including Q3 and Q4 at about the same rate both in terms of revenue but also in terms of profitability," he said.
According to the CEO FY25 is going to be more about the repositioning of the brand and the company is likely to see acceleration in FY26.
"Next year we start to see where it's not dilutive to our overall performance and that's our target for next year. At the same time, we will take that opportunity to position the brand to where we want it to go for the future so FY25 is going to be more about repositioning the brand and normalizing it down to where it's not dilutive to us and FY 26 is where you will see the acceleration of that brand," Joseph said.
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