V-Mart Retail, which is a homegrown fashion retailer, has unveiled its unaudited financial results for Q2 and H1 ended 30th Sep 2021. The company saw sustained recovery post the second wave of Covid related disruptions, despite the early part of the quarter remaining impacted by partial lockdowns in parts of the country.
According to the company’s official statement, the acquisition of 74 stores in South India, effective from 1st September also helped increase the sales recovery to 107 percent for the quarter, versus pre-Covid levels (Q2 FY20). On a comparable basis, excluding the addition of 74 unlimited stores, the recovery from pre-COVID levels stood at 100 percent for the company.
“The rapid market uptick post the second wave of COVID-19 saw a strong recovery on the back of increased operational days and festive led consumption. Though the business got disrupted in Q1 owing to the second wave, it was encouraging to see operations recover quickly from mid-June onward, with rapid re-opening of our stores in almost all markets,” Lalit Agarwal, Managing Director of V-Mart Retail, said.
Growth and Expansion Plans
The company continues to remain focused and committed to the accelerated store expansion plan with 86 net store additions for the quarter (including 74 stores acquired in South India) and now operates a total of 368 stores across 26 states. The southern acquisition and transition went ahead smoothly.
The immediate focus of the company in the newly formed south zone remains on ensuring people and product continuity while improving merchandise assortment, sharper pricing and integration of systems and processes. A key initiative in the overall merchandise strategy for the company will now be cross-populating selective stocks from south to north, and vice versa to add more variety and better options for consumers of both geographies.
Improved sales and better supply chain management initiatives helped improve EBITDA to 6.1 percent for the second quarter, which traditionally remains a subdued and a small quarter impacted by end-of-season sales and lower margins. The inventory levels remained healthy despite the up stocking for the festive season with comfortable liquidity and cash position.
Digitalization Shoring Up the Company
The company asserts that its customers continued to increasingly leverage the convenience of a digital platform with the online channel continuing to register dynamic growth. Digital content and social media initiatives remain increasingly central to the overall marketing strategy. The company has also started launching exclusive styles on its online platform which is witnessing encouraging traction.
“Strategic outreach of our brand through our omnichannel platform has also been encouraging.
We saw significant consumer acceptance of our digital-based shopping avenues during the
quarter and continue to build upon that level of consumer trust by exciting offers, newer
merchandise and customer service,” Agarwal added.
It continues to invest significantly in digital transformation projects and data analytics to further augment decision support systems across all parts of the business.
A Strategic Change
The company has reportedly appointed Aakash Moondhra as the new Chairman of V-Mart Retail. With this change in its leadership structure, further improving the corporate governance framework with the role of Chairman and Managing Director now being split, with Moondhra (Independent Director) being designated as the Chairman, while Agarwal would continue in his role as the Managing Director.
“The appointment of Aakash as the chairman will herald a new era of corporate governance in the company. He has been a torchbearer of ethics and governance. This indeed is a big change for a promoter-led company, which is now embarking on its new charter of growth, ably supported by a deep-rooted professional and independent governance culture,” Agarwal informed.
Moondhra is the Global CFO of PayU, a Naspers group company and continues to remain an independent Director on the board of VMart.
“I am thankful to the board for posing the confidence in me. I will try my best to help contribute to making V-Mart an even better organization than it already is and I look forward to this exciting journey together with the fellow board members,” Moondhra stated.