In an interaction with Shivendra Nigam CFO, CANTABIL RETAIL INDIA LTD.
“Fuelling sustainable growth: Cantabil's enhanced emphasis on customer needs and meticulous planning”
In financial year 2022–23, Cantabil Retail India opened 69 new retail stores across 14 states, enhancing brand recognition and reach. With a total of 469 stores opened to date, the company has become a prominent player in the retail industry. Excerpts from an interview with the company’s CFO Shivendra Nigam
In Q4FY23, the company registered a 30 per cent growth on YoY basis to ₹172.8 crore, while the net profit zoomed by 107.80 per cent from the corresponding quarter last year to ₹16.9 crore. What were the contributing factors for the company’s stellar performance?
Cantabil Retail India has been experiencing a journey of growth with a robust emphasis on extending its retail presence and inaugurating 6-7 stores each month. The company’s recent strategy, spanning the past three years, to broaden our reach not only across Tier I cities but also into Tier II and Tier III cities and beyond, has yielded remarkable success. Our approach involves a dynamic expansion plan aimed at swiftly augmenting our visibility both offline and in the online realm. In FY 2022–23, Cantabil Retail India opened 69 new retail stores across 14 states, enhancing brand recognition and reach. With a total of 469 stores opened to date, the company has become a prominent player in the retail industry.
It is driving revenue growth through new apparel and accessories stores. Venturing into new markets like Uttar Pradesh, Maharashtra, Punjab, Rajasthan and others, the brand is catering to a broader mid-premium customer base while maintaining a strong online presence as well to further utilise potent branding techniques to attract more customers and boost the average ticket size. Demonstrating financial discipline, Cantabil Retail India has achieved robust sales and notable profit after tax (PAT) growth of 107.80 per cent in Q4FY23. The company’s commitment to extending the brand’s reach throughout India via online and offline avenues, in conjunction with successful branding approaches, has set the stage for the company to experience consistent progress in the upcoming years.
What is the company’s vision and strategy for further expansion?Are there any specific growth targets or plans in place for increasing the footprint in the future?
In the upcoming phase of expansion, we are gearing up to make substantial investments in Tier II and Tier III markets. There is a significant increase in awareness about fashion trends amongst the people in smaller towns and cities, and hence we see immense potential in Tier II and Tier III markets for our expansion. Our ambition is to vigorously expand and fortify our stance in the retail sector. Our plan involves the inauguration of 80 new stores within this fiscal year with a special emphasis on penetrating Tier II and Tier III cities, effectively entering previously unexplored markets.
This expansion will encompass the introduction of 12 stores dedicated solely to women’s and kids’ apparel, alongside five outlets offering footwear and athleisure products to cater to the growing demand. Seeing Cantabil Retail India emerging as a strong leader in the mid–premium market segment, we are guided by careful market research and a strong focus on keeping our customers happy. With unwavering confidence, we are determined to achieve our growth objectives and propel the business toward continued success. Thus, by prioritising customer needs and executing plans with precision, Cantabil Retail India is set to reach its envisioned milestones and sustain the momentum of its business.
At the moment, what are your top three strategic priorities?
Currently, our top three main focus areas involve expanding our range with new products, making our supply chain stronger in new and existing markets, and enhancing marketing efforts to capture a larger market share. Furthermore, we are also foraying into the footwear and athleisure apparel clothing, aiming to attract a new customer base and increase brand affinity through trendy and comfortable athleisure offerings. At the same time, we are concentrating on expanding our stores in Tier II and III cities to engage with fresh customers, explore new markets, and extend our reach to a much wider audience.
In the light of changing consumer preferences and market dynamics, what strategy is the company implementing to identify and capitalise on emerging opportunities within specific segments? Also, can you provide an outlook for the upcoming quarters or fiscal year regarding segmental revenue growth expectations?
We are committed to adapting to the evolving consumer needs preferences and market dynamics using our strategic moves. To begin with, we have recently allocated a budget of ₹5 crore to foray into the footwear and accessories category, diversifying our offerings and attracting a wider range of customers with 30 SKUs. Additionally, we expanded our accessories category to encompass luggage, towels and perfumes, aiming to increase revenue contribution from 3 per cent to 4 per cent approximately in our total revenue figures this fiscal year. We are also focused on strengthening our online presence.
In fact, we are targeting 5-6 per cent of the total revenue from our online business. As a result of these ongoing endeavours, we expect our revenue figures to reach our target of 20-22 per cent CAGR growth in this fiscal year as well. This growth will be fuelled by our investments in new product categories and our online expansion. Furthermore, our unwavering dedication to customer satisfaction will continue, and we will stay agile to capitalise on emerging opportunities. As said earlier, online presence cannot be ignored in today’s time of evolving consumer preferences and we are establishing a strong presence in this domain.
What is the current competitive landscape for your company, and what are your plans for enhancing your competitive position?
We recognise the presence of several established players and emerging brands that contribute to a challenging market environment. In response to this, we have outlined a comprehensive strategy to enhance our competitive position. First of all, we are committed to continuously diversifying our product offerings by introducing new categories and expanding our existing lines. Secondly, we are significantly investing in our online presence and e-commerce capabilities. By doing so, we aim to tap into the growing trend of online shopping and engage with a wider audience. Moreover, our ongoing focus on offering ‘affordable fashion’ remains constant. We prioritise delivering value to our customers through well-crafted products that align with the latest fashion trends while maintaining competitive pricing. In a nutshell, our plans for enhancing our competitive position revolve around product diversification, innovation and quality assurance.