Go Fashion India, a leading fashion retailer, reported good earnings for the December-ended quarter with revenue growth of 24 percent and gross margin steady at around 60 percent. In terms of store expansion, the company added 35 new exclusive brand outlets in the quarter which takes the total count to 604.
Speaking to CNBC-TV18 after the earnings report, Gautam Saraogi, ED and CEO of Go Fashion said that the company is focused on offering affordable products to its customers.
According to Saraogi, the company wants to price most of its products under Rs 1,000, with the eventual aim of having the products in the range of Rs 900-Rs 1,000.
“We as a company want to price most of our products less than Rs 1,000. Today more than 80 percent of our products are priced less than Rs 1,000. So, we see the average selling price settling between Rs 900 and Rs 1,000,” he said.
He emphasized that the company does not take price hikes unless raw material prices fluctuate significantly. Despite inflationary pressure in Q3FY22, the company's gross margin was at 62 percent. However, the company expects the gross margin to be around 60 percent on an annualised basis.
“As a strategy we do not take price hikes for our existing products unless there are long-term increase in raw material pricing. So, for us growth is going to be driven by volume and value and value is going to be driven by new product introduction with a slightly higher selling price,” Saraogi said.
The company has seen encouraging same-cluster sales growth, with a volume growth of 11 percent. Saraogi expects a volume growth of 4-5 percent in same store sales going forward. The company had a decent quarter, with the management projecting sales of close to Rs 185 crore.
Go Fashion India also has plans to increase its online sales. The company aims to increase its online sales to 5 percent and take it up to 8-9 percent in the next 2-3 years. However, Saraogi does not see an increase in advertising spends.
Overall, Go Fashion India is focused on providing affordable fashion products to its customers while maintaining strong financial performance. With a focus on online sales and affordable pricing, the company is well positioned for continued growth in the future.
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First Published: Jan 30, 2023 1:41 PM IST
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