V2 Retail Ltd, whose Calcutta-bred promoters had once built and sold brand ‘Vishal’ to private equity firm TPG, is making a comeback to the ‘home’ state in a new avatar.
The eponymous value apparel retail brand V2, which operates mostly in the tier II and III cities, has chalked out aggressive expansion plans, basking in the confidence of turning around the business after three Covid-ravaged years.
The V2 management said it would open 40-50 stores this year alone and there are plans to open 50-60 stores every year in the future.
The company ended FY24 with a footprint of 117 stores, with the net addition of 15 stores during the course of the last fiscal.
In comparison, it added eight more to the store count with nearly an entire month to go before the close of the first quarter of FY25.
Describing the pandemic as a big dent to the business, Akash Agarwal, whole-time director, explained how the company has put the period behind.
“Now (we are) doing much better than pre-Covid. Last three years were a period of consolidation and this year we plan to open 40-50 stores,” he said.
V2 returned to the black in FY24 with a profit after tax of ₹27.8 crore compared with a loss of ₹12.8 crore in FY23. The company intends to take a ‘cluster-based approach’ for expansion, doubling down on states where it already has a foothold. The obvious choice is Bihar, Odisha, UP, Jharkhand and Karnataka.
The only exception is going to be Bengal. “We have a deep emotional connect as both of us were born in Calcutta. So, we want to re-enter the market, which is historically a good one, again to re-establish the brand,” Agarwal recounted.
V2 was founded by Akash’s father Ram Chandra Agarwal who is the chairman and managing director.
V2, which competes with Zudio of Tata Group’s Trent, opened two stores in Siliguri and Chinsurah and at least six-seven are in the pipeline in the state including Barasat and Asansol.
Reshaping biz
V2, which earns 93 per cent of revenue from apparel, was mostly dependent on vendors for designs. Not any more though.
The company hired 30 designers to scale up inhouse design capabilities, reduce reliance on outsiders. Plan is to design 80 per cent of apparel in-house, up from 35 per cent.
Agarwal said building design capabilities is part of a strategy to drive same store sales growth (SSSG).
“We closed FY24 with ₹860 per square feet per month. Target is to reach ₹1,000 by this year and then ₹1,200. In contrast, sales per square feet was ₹640 a month in FY23,” Agarwal said, adding that it is experiencing double digit SSSG.
Agarwal observed that there was a shift taking place from the unorganised to organised sector at the bottom of the period, which V2 serves.
“There is a lack of value fashion brands – people at the bottom strata are also craving for fashion because of social media penetration. There is also income growth at the lower segment, may be smaller but growth (is there),” Agarwal said.
