According to an official, footwear giant Khadim India Ltd. plans to finish demergering its distribution division by March 2025 and then list on the stock exchanges by May.
In order to increase sales, the company is also looking into rapid commerce partnerships with platforms like Zepto for utility products like EVA slippers and school shoes, he said.
In order to increase profits and valuations, the footwear manufacturer based in Kolkata had previously declared its intention to separate its manufacturing and distribution operations into KSR Footwear Ltd (KFL).
Before the NCLT, the demerger is still pending. By the end of this month or early March, an order is anticipated. As of now, 1st April is the demerger’s scheduled effective date, said Indrajit Chaudhuri, the chief financial officer of Khadim, informing that the demerged business (KSR) will be listed in May.
It is anticipated that this strategic change will unleash significant value for its core retail company, which consists of about 890 stores operating under the Khadim brand and generates close to 66 per cent of total revenue.
In the third quarter, which ended in December 2024, the distribution division accounted for 31.2 per cent of total revenues. The organisation now has 776 distributors after onboarding 50 new ones.
According to the official, the footwear retailer has taken a number of steps to boost sales, such as lowering the prices of its current line and launching new items with reduced maximum retail prices (MRPs) to draw in customers.
By improving product selection and digital marketing, Khadim hopes to increase its online revenue share by 4-5 percent. As part of its diversification plan, Khadim also plans to introduce an athleisure line in the spring and summer.
Gross margins should increase in the upcoming quarters as a result of this and higher-margin products. The business is switching underperforming franchisee locations to a commission-based model, in which franchisees receive a sales fee and the corporate runs the business.
Additionally, by outsourcing warehouses and switching from fixed to variable costs, Khadim is lowering fixed costs, especially in its e-commerce activities. It is anticipated that this action will increase overall profitability.
