Fabindia net doubles on premium play

Fabindia’s sales expanded 7% in FY19, while net profit nearly doubled after the retailer of ethnic products focused on premium merchandise across categories — apparel, food and personal-care items and decorative furniture.

The 59-year-old firm, popular for selling ethnic products sourced mostly from rural areas, posted sales of Rs 1,148 crore with a net profit of Rs 116 crore, according to financials sourced from Veratech Intelligence, a research platform.

In FY18, it had posted a net profit of Rs 59.4 crore.

A year ago, sales growth had fallen to its lowest in over a decade, hurt by sourcing issues in the immediate aftermath of the November 2016 demonetisation. Business for the company that sources a bulk of its products from the rural market was hit after the government’s demonetisation drive, as it saw restricted supplies from craftsmen for the next six-eight months.

“We saw good overall recovery with many new initiatives yielding results. We are rapidly scaling our experience centres and these have helped increase store productivity and profitability,” said Viney Singh, managing director, Fabindia.

“Our push behind fusion and western wear assortments and more on-trend styles has been very well received. Optimisation of cost structures after GST has also helped bring down costs.”

Nearly two years ago, Fabindia also launched four strategic business units (SBUs) — Home and Lifestyle, Personal Care, FabCafe and E-commerce — on a trial basis to sharpen focus and expand. Fabindia was founded in 1960 by John Bissell to market the craft traditions of India.

It started out as an exporter of home furnishings and the first retail store came up in the Greater Kailash area of Delhi, 15 years later. In the mid-1990s, Bissell’s son, William, took over the company.

Source:- https://retail.economictimes.indiatimes.com/news/apparel-fashion/apparel/fabindia-net-doubles-on-premium-play/71452022