Renowned ethnic apparel retailer Fabindia has recorded its lowest sales growth in the last two decades. The brand has marked out that difficulty in sourcing due to the demonetisation initiative by the central government and rapidly increasing competition from large chains and fashion brands are the reasons behind consistently declining sales.
In the financial report shared by the company, it recorded a 2 per cent increase in the sales as compared to the previous year to Rs. 1,060 crores on a standalone basis. There was a significant decline of 42 per cent in the net sales to Rs. 59.33 crores.
The company claimed that the lower profit was due to an impairment loss of Rs. 57 crores, claiming that eliminating the one-off item, profits would have increased by 13 per cent to Rs. 116.3 crores.
Reportedly, Fabindia sources a majority of its products from rural areas and two years back, the demonetisation drive affected its business, as the company failed to meet the supply demand for a period of 6-8 months.
Viney Singh, MD, Fabindia mentioned that Fabindia is always known as a brand that does not offer discount and works in tandem with the craft and small-scale sectors. “The effects of demonetisation and introduction of GST in 2017/18 were heightened and prolonged,” Viney said.
Notably, in the last fiscal, to intensify its focus and boost the brand, Fabindia introduced four exclusive separate business units (SBUs); Fabcafé, Home and Lifestyle, Personal Care, and E-commerce.
Source: https://in.apparelresources.com