Malviya, The Economic Times
19 January 2016
Overseas has crossed Rs 1,000-crore sales mark to become the largest
retail apparel brand in the country, significantly ahead of nearest
rivals Zara and Levi's India.
During 2014-15, the ethnic wear firm posted a 12% rise in consolidated
sales at Rs 1,148 crore with 36% increase in profit before exceptional
items at Rs 112 crore. Its domestic business grew 25% to touch
Rs 767 crore ahead of largest fast-fashion brand Zara that clocked
sales of Rs 720 crore during the same period.
"Customers are moving to one of two responses to retail.
Either they are responding to products as commodities, or investing
in curated products and experiences. We will continue to focus
on the quality of our design and curation," said William
Bissell, managing director at Fabindia, which runs more than 205
stores in India. The company also attributes its success to a
policy of no discounting and instead build a sustainable cash
Founded in 1960 by Bissell's father John Bissell to market craft
traditions of India, Fabindia started out as a company exporting
home furnishings. The first retail store was opened in Greater
Kailash, New Delhi, 15 years later. In mid 1990s, William Bissell
took over the company.
The company added the non-textile range in 2000, while organic
foods and personal care products were launched nearly a decade
ago. Experts said the brand, which has expanded its portfolio
over the years, has been finding acceptance among younger consumers
since the last decade, a new development in a category earlier
largely restricted to older buyers.
"The brand has been consistent to its core and they have
been adding newer categories to remain relevant and also earn
higher margins," said Devangshu Dutta, chief executive at
retail consultancy Third Eyesight. "The challenge is to continue
the momentum since their sourcing is dependent on thousands of
craftsmen instead of a few large manufacturing units."
Ethnic wear, a segment still mostly fed by the unorganised segment,
has been growing at an average of more than 10% a year over the
Leading department chains such as Shoppers Stop, Lifestyle and
Westside are increasing the width of their private label range
and offer contemporary styling in the ethnic space, fuelling growth.
The ethnic wear segment is also seeing a lot of aggressive expansion
from newer players both in online and brick-and-mortar space,
something that could hurt Fabindia's growth prospect going forward.
For instance, Kolkata based Manyavar, which had just one store
till 2008, has more than 400 stores across the country now and
is expanding its portfolio from wedding and special occasions
to everyday clothing.
Fabindia, in comparison, opened eight stores last fiscal and
has added 14 doors in the current financial year. ET, last month,
reported that the private equity arm of Louis Vuitton Moet Hennessy
(LVMH), plans to sell its 8% stake in Fabindia.
(Published in The