V-Mart Retail is planning to launch around 40 stores in 2020-21. These stores will be launched with an investment of Rs 70 crore.
Currently, the value fashion and lifestyle products retailer has 260 stores in almost 195 locations across India. The company’s stores are largely present in tier-2 and 3 cities.
Speaking on the sideline of RAI Retail Leadership Summit 2020, Lalit Agarwal, Chairman and MD, V-Mart Retail, said, “Even as we are talking about the economy witnessing a slowdown in consumption, it is a temporary phase. Rather, this is the best time for organised retail players to be present in this market.”
By adding 40 stores, the company is looking at taking the count to 300 outlets in the next fiscal.
“We will be investing Rs 60-70 crore for this expansion. We will use the funds for enhancing our back-end support as well as for revamping some of the existing stores to meet the changing needs of the consumers,” Agarwal further stated.
V-Mart Retail is expecting to close the year with around 20% growth in topline.
He added, “Our strategy to expand in the underserved tier-2 and 3 markets has helped us in our growth. Also, since 70 per cent of our offerings are private labels, (it) has contributed to margin improvement, despite the slowdown.”
The company reported a revenue of Rs 1,433.75 crore in 2018-19.
According to a report by KPMG, private labels have the potential to develop into self-sustaining brands with a loyal consumer base and grow beyond the captive platform.
The report stated, “Between 2019-22, private labels are expected to grow 1.3-1.6 times faster than e-commerce platforms and continue to generate 1.8-2 times higher margins than external brands.”