India’s leading textile conglomerate Raymond Ltd. witnessed progressive recovery witnessed on a month-on-month (M-o-M) basis in the second quarter of FY21.
The company believes that while July and August were impacted by local lockdowns, September witnessed recovery of secondary sales leading to improvement in primary sales.
Currently, consumer demand is back to 70 per cent of PY level for The Raymond Shop (TRS), while Exclusive Brand Outlet (EBO) sales are back to 50 per cent of PY level.
It is also witnessing higher average ticket sizes and conversions as compared to previous year.
Notably, there is also week-on-week improvement in secondary sales across channels.
For the second quarter, its operating cost stood at Rs. 304 crore, which is lower by 48 per cent on Y-o-Y basis while with focused working capital management and cost rationalisation, debt level was maintained.
With the onset of wedding and festive seasons, the core business of branded textile witnessed good traction in September in trade channels primarily driven by recovery in secondary sales.
Currently, the company is witnessing 85-90 per cent recovery levels in its TRS network in Tier IV-VI markets largely driven by reverse migration, good harvest and lower COVID-19 impact.
“Recovery in branded apparel business remained impacted with intermittent lockdowns delaying the opening of retail touch-points and malls. Additionally, we also exercised control on primary sales to channel partners. There was a higher contribution from online & clearance sales to realise cash as we continue to focus on working capital management and liquidity.
The garmenting segment recovered to 80 per cent levels in Q2 driven by exports to US & Europe markets and additional sale of PPE products.
EBITDA margins higher at 10.1 per cent versus 5.3 per cent in PY led by better product mix and cost optimisation,” the company informed.
High value cotton shirting segment performance impacted mainly due to weak domestic demand.
Gautam Hari Singhania, CMD of the company commented on the results, “With consumer sentiments getting better on a sustained weekly basis, there is a rebound in consumer demand which is evident by increased footfalls in our retail stores. Our focused approach on cost optimisation and operational efficiencies has helped us navigate through tough times and maintain both our liquidity and net debt levels. As we move in the second half of the current financial year, I am hopeful that the economy will improve with tailwinds giving businesses the impetus for recovery.”
With its various offerings like ‘Raymond ready to wear’, ‘Park Avenue’, ‘ColorPlus’, ‘Parx’, ‘Raymond made to measure’ amongst others, Raymond has one of the largest exclusive retail networks in the country with over 1,500 stores in more than 600 towns.
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