Leading fashion retail firm Aditya Birla Fashion and Retail Ltd (ABFRL) is targeting to hit Rs 25,000 crore revenue after five years, according to its Chairman Kumar Mangalam Birla.
The company is now poised to strengthen its leadership position in the industry even further, Birla said while addressing the shareholders in the annual general meeting of the company.
"This is an outcome of a robust portfolio of iconic brands, one of India's widest distribution networks, a digitally advanced organisational setup, a consumer-centric and innovation-focused culture and a balance sheet re-crafted to fuel growth," he said.
According to a statement issued by the company, while replying to a shareholder question, Birla said: "ABFRL targets to hit revenues of Rs 25,000 crore after five years".
In the pandemic hit FY21, ABFRL had recorded net revenue of Rs 5,249 crore and an EBITDA of Rs 628 crore. It was Rs 8,788 crore in FY20.
"The plumbing work is done. And now is the moment for a big leap to unlock the full potential of this business. We recognise the opportunity. And we will, for sure, make it count in a manner that creates value for all stakeholders," he said.
ABFRL has lifestyle brands like Louis Philippe, Van Heusen, Allen Solly and Peter England. It has licensed right for US-based fast-fashion brand Forever 21 and also operates large format fast fashion store Pantaloons.
While talking about the apparel sector, Birla said despite the debilitating blow of the pandemic on the retail sector, it was evident that businesses and brands built around the ideas of innovation and consumer centricity would not only survive but thrive.
"As we look ahead, the markets are expected to return towards normalcy towards the latter half of FY22. In addition to favourable macro factors, the industry will be further strengthened by the increased adoption of digital technology and the underlying trend of value migration from the unorganised to the organised sector," he added.
According to Birla, ethnic wear is a clear area of focus for ABFRL.
"Ethnic is the largest segment in the fashion and apparel sector with a significant profit pool. It is also a sector that has strong resilience to apparel cycle fluctuations and is least impacted by competition from global brands," he said.
Over the last two years, ABFRL has carefully crafted a portfolio that gives it a sizable presence across key price points and sub-segments.
"Through acquisitions and partnerships, ABFRL now has one of the strongest and most comprehensive portfolios of brands in the Indian ethnic space," he added.
In January this year, ABFRL had acquired a 51 per cent stake in designer brand Sabyasachi and entered into a strategic partnership with brand 'Tarun Tahiliani' in February.
It has also raised Rs 1,500 crore by issuing a 7.8 per cent stake on a preferential basis to Walmart-owned Flipkart Group in FY21.
While speaking on cost, working capital and debt management, Birla said the pandemic had put a temporary strain on the balance sheet, as the company's debt peaked upwards of Rs 3,000 crore at the end of Q1 FY21.
"Your Company took some very bold steps to counter this impact and emerge stronger," he added.
On ABFRL's accelerated digital transformation, Birla said it has adopted a three-pronged strategy towards digital acceleration.
The company revamped its brand and consumer digital connect, aggressively pushed e-commerce play through deeper partnerships with third-party e-commerce platforms and also by investing in our own brand.com and digitised the backend operations, he noted.
"As a result, digital channel sales grew 40 per cent over the past year,' he added.