Grasim Industries’ textile division plans to expand with 100-120 new retail stores in smaller cities and towns over the next two years to enhance its presence.
Grasim Industries’ textile division is planning a significant expansion into smaller cities and towns by opening 100-120 retail stores over the next two years. The company aims to tap into the potential growth in these areas and boost its market presence, according to Satyaki Ghosh, CEO, (Domestic Textiles).
The primary focus of this expansion is on Linen Club, Grasim Textiles’ premium linen products brand, which currently contributes about one-third of the company’s textile business, valued at approximately Rs 3,000 crore. Currently operating 217 brand stores nationwide, the company plans to open new Linen Club retail outlets in smaller cities and towns to cater to the growing demand, he shared.
Distribution network expansion
Additionally, Grasim Textiles intends to expand its distribution network by increasing collaborations with multi-brand retailers, aiming to reach 12,000 such retailers in these markets, up from around 8,500 at present. As part of its capital expenditure (capex) plan, the company has allocated Rs 122 crore for textiles, insulators, and other items in the fiscal year 2024, he said.
Sluggish demand trend
While the textile industry, including apparel, faced a sluggish demand trend in the first quarter of the current fiscal year, there has been an uptick in demand since July and August, largely driven by the Onam and Eid festivals. Ghosh acknowledged that the demand might remain flat in the second quarter due to a delayed festive season but anticipates growth in the third and fourth quarters, coinciding with the festive season and summer stocking.
Grasim Textiles is forecasting a 5 to 6 per cent growth in textile demand for the current fiscal year. Exports have also shown promise, contributing about 25 per cent of the company’s textile revenue, with expectations of continued growth in the months ahead.
E-commerce focus
In addition to its physical expansion efforts, Grasim Textiles is focusing on e-commerce, which currently accounts for 15 to 18 per cent of its retail sales, Ghosh shared. The company plans to introduce an omni-channel strategy in the future, offering customers the flexibility to shop through both offline and online channels.
Innovation and new product development are also on the agenda, with the recent introduction of the “waste-to-wealth” brand ‘Cavallo’. This brand, made from waste linen blended with cotton, is aimed at the youth market and is available exclusively online, he said.
While Q1FY’24 saw a decline in textiles revenue to Rs 549 crore, down from Rs 620 crore in the corresponding quarter last year, Grasim Textiles is positioning itself for expansion in the Indian textile market.
Source: www.republicworld.com
