Welspun India Ltd (WIL) is one of the largest home textile manufacturers in the world with a distribution network in over 50 countries. The company has state-of-the-art manufacturing facilities in India. Being the largest exporters of home textile products from India, the company caters to the likes of Wal Mart, Macy’s, JC Penney, Carrefour, Auchan, Tom Tailor, Tesco, Marks & Spencer, John Lewis etc. to name a few.
How you would rate the impact of demonetisation on the home furnishing industry by and large? How Welspun has been impacted?
We are operating in the home essential category, for us majorty of buying for consumption happens before the Diwali. So, November anyways is the lean period for us as it comes just after Diwali. Primarily, we are retailing towels, bed sheets, pillows; usually, purchases for such items occur before the Diwali. However, during the first week of demonetization almost every category was down which was recovered well in the following months, So, we did not see any direct revenue loss in our topline or bottom line due to demonetization.
In the nutshell I can say that we have seen a very big dip in the first two weeks of November. However, if we compare last year to this year, we have grown substantially.
What percent of sales were declined during cash crunch period?
Impact of demonetization was on only those channels where we are directly dealing with the customers. Our major revenue comes from export, and only 5% revenue comes from domestic. So, whatever impact we are talking here, is just a fraction of 5%. Half of sales come from direct to consumer model which is basically B2C( shop-in-shop model, e-com and distribution). Our B2b model includes corporate sales, government, institutions, etc. This channel was not affected due to demonetization at all.
So, what is your growth rate considering demonetisation?
Our growth differs from channel to channel. Averagely, we are growing around 25%-30% from last year to this year. Our online channel is growing at the rate of 100%.
Kindly highlight your current retail spread?
We have 225 shop-in-shop outlets which are present within all big retail chains in the country including Shoppers Stop, Home Centre, etc. After that, we have distribution model via mom and pop stores where are reaching out to 1500 retail multi brand outlet. Apart of these, we have our exclusive e-commerce portal, and we are also present on all leading market place sites.
As of now, we don’t have any exclusive store; however, we have five factory outlets or company owned stores. All factory locations have a retail store along with them. We have two such stores in Gujarat, one in Mumbai and two in Delhi. We see this channel as a customer delight rather than a business model. These stores are spread across 400 to 500 sq.ft of area.
What are the major categories that you are retailing?
We are majorly operating in two categories including bath and bed. Our bath product folio includes, doormats, bathrobes, towels, etc. However, in bed category the product line includes bed sheets, comforters, pillows, etc.
Do you also retail your private label?
Mainly, we have two brands named as Spaces Home and Beyond’ and ‘Welhome. Also we are providing these brands to retail chains in their name where we are operating. We are also retailing Disney licensed merchandise in the kids category. We have the licensing rights of 25-30 Disney characters. Apart from this, we are manufacture to many leading international brands across the world.
Any comment on ongoing end of season sale (EOSS)?
We are not the fashion driven category; only 25% merchandise is driven by print or kind of seasonal. Rest 75% is all season range, which is being retailed throughout the year. When season is changed we put certain amount of merchandise on discount. On an average our discount ranges from 15% to 30%.
Only 5% to 7% merchandise is put on 50% discount. Usually, such merchandise is more than two year old. Our ongoing EOSS would be over by the end of January.
Festive season fetches maximum traction for you, so what is the relevance for having EOSS?
EOSS is an event which is created by the retailer not the brand. During the end of season sale retailers generate maximum footfall. We participate in eoss to leverage from the footfall. Of course, retailer gives us the background about how big the event is. They do share their wish list, but it is absolutely our decision when it comes to deciding the discount limit.
Averagely, we generate 10% to 15% sales from the EOSS.
At last, kindly mention your growth plans?
We are looking to register 30%-40% growth on Y-o-Y from domestic retail business. We have already invested Rs. 600 cr for our carpet business. As of now, North and West are our biggest markets.