H&M now has a small lead over competitor Zara, the world's largest fashion retailer, in terms of topline and hopes to widen the gap in the coming months. Zara, which is also pushing affordable fashion wear, has a joint venture with Tata group’s apparel retailer Trent. The brand has 22 stores in India as per Trent’s 2018-19 (FY19) financial report.
Launching a collection a month isn't easy, but AB Fashion will be among the first few in the country to be doing this, as pressure to provide newness within its assortment increases. Dikshit said, in a call with analysts recently that the company would switch to the new inventory model by digitising its product creation and go-to-market operation, working on a virtual trade show system that reduced both design risk and potential markdown liabilities. The ongoing Spring-Summer 2020 season would be the first full period for the new model that the retailer was putting in place.
According to the company's FY19 annual report, lifestyle brands, part of the Madura segment, gave the company nearly 53.02 per cent of its total revenue of Rs 8,118 crore, followed by retail chain Pantaloons which contributed 39.34 per cent and the rest coming from other businesses.
Given that lifestyle brands of AB Fashion had grown in double-digits in the first nine months of FY20, analysts believe the business would continue to contribute over 52-53 per cent to the company’s topline in the current financial year.
Contributors to growth include a perceptible shift from unbranded to branded apparel wear, pushing retailers to make deeper inroads into smaller towns and cities. E-commerce has helped too, with organised players now able to service “pin codes” they could not earlier.
A recent report by KPMG and the Retailers Association of India said that the penetration of e-commerce within the domestic fashion segment would touch 12 per cent in the next four years from 7 per cent now, higher than cosmetics whose e-commerce penetration would grow to 11 per cent from 8 per cent now.
AB Fashion has been aggressive with its store roll-outs in recent months, adding 150 stores across formats in the October-December 2019 period alone, the highest within a quarter. FY20 could see the company add as many as 500 stores across formats, the first time it would be doing so, analysts tracking the company said.
Additionally, the company is identifying need gaps within ethnic and women’s wear, preparing to launch a mass-market ethnic wear brand in the future and integrating its acquisitions such as Jaypore and Shantanu & Nikhil into its system. It will also continue to launch newer bridal and wedding collections to tap the huge marriage wear market in the country.