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Informist, Thursday, Aug. 14, 2025

--Aditya Birla Fashion: See gradual pace of recovery of demand in market

--CONTEXT: Aditya Birla Fashion mgmt's comments in earnings investor call

--Aditya Birla Fashion: Ethnic segment continues to be growth engine for co

--Aditya Birla Fashion: See net store additions in Pantaloons going ahead

--Aditya Birla Fashion:Looking to raise more funds to invest in TMRW segment

--Aditya Birla Fashion: Q1 wedding-related sales up strongly YoY on low base

By Rajesh Gajra

NEW DELHI – Aditya Birla Fashion and Retail Ltd. has hit the bottom in terms of the closure of Pantaloons segment's stores, taking place as part of a deep network correction over the last 15-18 months, the company's management told investors and analysts in a post-June quarter earnings conference call Thursday. "You are going to start to see net store additions as we go forward," a top executive said in the call.

But the number of stores added may be fewer, the management said, as the focus would be on opening larger stories that are cleaner, more impactful, and very contemporary, he said. The company had 405 Pantaloons stores with an aggregate area of 5.73 million sq. ft. at the end of the June quarter, as against 417 stores with 5.74 million sq. feet area at the end of the year-ago quarter.

The Pantaloons segment recorded a 1% on-year decline in revenue at INR 10.94 billion in the June quarter. Excluding the impact of closed stores, on a like-to-like basis, the revenue growth was flat in the June quarter. The company had recently launched a new retail identity format for Pantaloons stores.

The management said select Pantaloons stores had not been delivering sales grown consistently, which led to the network correction strategy and closures of these stores. Further, in the new retail identity format launched and applied to about half the existing stores, the new format stores "are performing better than the old stores and that should be natural," a top executive said.

The management said the company's ethnic wear business continues to be a powerful growth engine, anchored by a comprehensive ethnic brand portfolio in India spanning designer led brands to premium ethnic wear brands. The company had 645 ethnic brand stores at the end of June quarter, which included 11 international stores. The segment reported on-year revenue growth of 25% at INR 4.36 billion in the June quarter. 

Within the ethnic wear segment, the Tasva brand recorded a substantially high on-year growth of 72% in sales in the June quarters, according to the company's earnings investor presentation. On a like-for-like basis, the sales growth was lower at 39% on year. Strong wedding season demand and improved metrics drove growth in the Tasva brand and four new Tasva stores were opened in the June quarter, the company said in the investor presentation.

The Tasva brand benefitted from a low wedding base of last year, a top executive said in the call. Very strong growth was showing up in any wedding-related purchases due to the lower base, he said. There was a higher number of wedding dates in the June quarter compared to a negligible number in the same quarter a year ago, the company said in the investor presentation.

Responding to an analyst's query in the call on the company's fund raising programme for investing in the TMRW segment, a digital business including direct-to-consumer, given the weak cash flow in the business, a top executive said the company expects to raise more capital in the current round. The company is "looking to raise close to or north of $100 million," he said.

The first investment made in the TMRW segment was announced Wednesday. The company announced Wednesday the execution of a shareholders agreement and share subscription agreement between its wholly-owned subsidiary Aditya Birla Digital Fashion Ventures Ltd. and ServiceNow Ventures Holdings Inc. for investment of around INR 4.37 billion by way of convertible preference shares. The ServiceNow's agentic artificial intelligence and automation capabilities will power TMRW's tech platform, the company said in the earnings investor presentation Wednesday.

The management of Aditya Birla Fashion said that although the revenue growth for the company was good in the June quarter, the broader apparel market sentiment "remains cautious and the pace of recovery continues to be gradual."

The company had announced its June quarter earnings numbers on Wednesday. The consolidated revenue of the company from continuing operations rose 9.4% on year to INR 18.31 billion, while the company reported a consolidated net loss of INR 2.12 billion as against a net loss of INR 1.61 billion in the year-ago quarter. The bottomline number included continuing and discontinued operations.

On Thursday, shares of the company closed at INR 75, up 0.4%, on the National Stock Exchange.  End

Edited by Avishek Dutta

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