The ₹4,000-crore fashion retailer Lifestyle International is eyeing ‘single digit growth’ this fiscal. Same store growth has been ‘flat’ so far, but is expected to pick up over the next few months.
The slowdown, according to Vasanth Kumar, Managing Director, Lifestyle International Pvt Ltd (India), is primarily due to delay in new mall construction and a higher absorption of space in existing malls. Increase in consumption has not been commensurate with the doubling of retail space.
“In the last four years, there has been a near doubling in retail space. But consumption has not doubled. Hence, we are now witnessing a single-digit growth,” he told BusinessLine.
According to Kumar, there is “no recession” in the apparel sector but same store growth has slowed down. This was due to the ‘cyclical nature’ of mall construction. The cycle is expected to phase out over the next couple of years.
“As absorption slows down and new malls come up, we will witness same store growth. Same store growth is expected to be in high single-digit next year (FY21) and double-digit in FY22,” he said.
From 10-11 per cent growth annually, the apparel industry expects growth to be in the range of 8-9 per cent this fiscal, sources said.
For Lifestyle, part of the Dubai-based Landmark Group, omni-channel retail (where it sells both offline and offline) is expected to be a major growth driver. Omni-channel retail will enable customers to order online and pick up offerings from the store or it will enable customers to place orders online at a store and then get it delivered at home.
The company has, over the last three years, invested close to ₹100 crore to ramp up its Web sites across brands like ‘Lifestyle’ and ‘Max’ (the value chain format). It is now looking to shore up presence across marketplaces like Flipkart and Myntra. Private labels of Lifestyle, which include brands like Bossini, UCLA and Melange, are available across the sites.
“Online sales are 3 per cent of our turnover. Our target is to take it up to 15 per cent in the next three-four years,” Kumar said.
Average capex for Lifestyle continues to be in the range of ₹100-150 crore a year. Capex, funded through internal accruals, will go towards setting up of 8-9 stores annually, each coming up at a cost of ₹15-20 crore. Stores will be in malls.
Lifestyle currently has 78 company-owned stores pan-India. It does not follow a franchise model.