In an interaction with Sushil Batra CFO, Relaxo Footwears Limited

“Relaxo is committed to cater the rising demands of customers”

As the largest footwear manufacturer in India, Relaxo is dedicated to not only meeting but exceeding customer expectations, driving the growth of the Indian footwear industry, and leaving a lasting impact on the market, enunciates Sushil Batra, CFO - Relaxo Footwears Limited

Q1FY24, the company posted robust growth in sales and profit. What were the factors which contributed and fueled your growth? 

Q1FY24 results were an outcome of favourable market conditions as well as various operational and strategic operations undertaken by the company. The gradual easing of inflationary pressures and correction in key raw material prices helped bolster operating efficiency and profitability. Moreover, the expectation of stable raw material prices will positively help the company in sustaining its profit margins.

This quarter saw strong volume uptake, particularly in the open footwear segment which has higher demand during the summer season. Relaxo witnessed a y-o-y volume growth of 33 per cent, selling 5.1 crore pairs in this quarter which reinforces the trust that customers place in the brand and product quality. Relaxo continues to drive success with its customer-centric approach by offering highly competitive prices without compromising on product quality.

The in-house manufacturing capabilities act as a key differentiator for the company since it helps in ensuring consistent product quality at the lowest cost. The strong brand recall in the market has solidified Relaxo’s reputation as a trusted footwear company. To simplify, the remarkable growth witnessed in this quarter can be attributed to a blend of favourable market conditions, competitive pricing strategies and strong open footwear demand in the summer season. As the largest footwear manufacturer in India, Relaxo is dedicated to not only meeting but exceeding customer expectations, driving the growth of the Indian footwear industry, and leaving a lasting impact on the market.

Could you share some thoughts on your strategy for new product development in the sportswear segment? 

Relaxo, with its customer-centric approach, is committed to catering to the demands of the customers, which includes developing sportswear products that align with the latest trends and growth of athleisure footwear amongst the target consumers. Regular feedback is collected from the market and distributor meets are organized from time to time. The fashion industry is very dynamic and demands constant evolution. Relaxo is committed to serving customers with the latest and most fashionable designs. New product development is a continuous process which ensures that fresh designs hit the markets regularly.

To further strengthen the new product development, Relaxo has recently developed an innovation centre that will serve as a hub for creative thinking and innovation. Efforts have been made to strengthen the design team at Relaxo which will help fuel the ability to cater to various customer preferences and better anticipate emerging trends. Overall, new product development remains key to having an established presence in the markets.

How do you see the demand outlook for the sportswear segment shaping up in the near future? 

The future of the sportswear segment in the near future appears very promising and Relaxo is well-positioned to capitalize on this opportunity. Sports and athleisure footwear segment remains highly underpenetrated in India and the demand outlook is increasing at a significant pace.

As people become more health-conscious and fitness-oriented, the demand and awareness for sportswear have been growing steadily. More & more individuals have adopted an active lifestyle following the COVID-19 pandemic leading to a surge in sports and physical activities.

The increasing disposable income of the middle class in India and a large population base presents an excellent opportunity in this segment. Relaxo is present in this segment through its Sparx brand which offers a wide range of stylish and performanceoriented sports footwear and helps cater to the demand of consumers across different age groups and demographics through MBOs, EBOs & e-commerce channels.

Can you shed some light on your competitive landscape?

The footwear industry has a very dynamic landscape comprising organised and unorganised players with various established and new competitors. The share of organized players in the footwear market is gradually improving with rising disposable income and increased preferences for quality and designs. Relaxo is a dominant leader in the wholesale business and has established a strong brand identity and market presence. Competitors in the distribution business focus more on either open or closed footwear. Relaxo on the other hand stands out among its competitors by offering a diverse range of brands i.e. Hawai, Bahamas, Flite & Sparx in both open and closed footwear. 

On the retail front, Relaxo acknowledges the need to further strengthen its market position and has targeted an expansion of 15 per cent in new stores(EBOs) in FY24. This will help increase customer reach and offer a more personalized shopping experience. Relaxo seeks to compete more effectively with established players who currently have a large scale of operations in the retail segment.

At the moment, what are the top 3 strategic priorities for the company? 

Relaxo’s strategic priorities are focused on the growth of the company. The company eyes new store openings (EBOs) as well as working on improving the efficiency of its retail operations. Further, Relaxo is increasing its presence on various e-commerce platforms to target a wider customer base and has also revamped its e-commerce team. 

The company has invested in an Innovation Centre and increased the size of its design team which would help fuel the business positively. BIS guidelines have been recently introduced for the footwear sector and the company is taking the necessary steps towards its compliance. Additionally, in a bid to increase automation, SAP S/4 HANA has been implemented recently which enhances control and ensures better data-oriented decision making