Anand Agrawal, CFO, V-Mart talks about footfalls, demand, plans for the ongoing festive season acquisition of Arvind Lifestyle Brands Limited and the way funds raised through the QIP will be used among others during a candid chat with Mansee Dave, Zee Business. Edited Excerpts:  

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Q: Lockdown and CORONA have had a huge impact on the retail sector. To what extent normalcy has returned, how are the footfalls and how many of your stores are operational at present?

A: Rightly said, the biggest impact of the lockdown has been on retail. But in the last two months, we have seen a trend in the market in which the footfalls have reached almost 80-90% level of the pre-COVID levels, which is a very promising sign. The trend of the customers that is visible especially during the festive period – the one that went off in August during Raksha Bandhan and August 15 – we saw a pent-up demand amid the customers which had a good impact, this is why we are being a little optimistic that going forward during the upcoming festive season – after September in October and November during Durga Puja, Diwali and Chhath – we expect that the market will remain quite strong. 

Q: With the Festival season ahead, what is the demand expectation and what are the plans of the company?

A: Currently, we are preparing ourselves in a way that we reach the 2019-20 period, which is termed as pre-COVID levels, and go beyond it as much as we can. Although the fear of COVID has not ended yet either from our mid or from the mind of our customers the kind of response, we have received in the last one month gives a sense that if there is not a major shock then good demand can be expected during the festive period. Keeping the same in mind, whatever buying, and stock were required as per the normal levels, we are preparing accordingly. Currently, we are also focusing a lot on preparation. We are preparing ourselves well to bring back the customers to the shop, communicate more with them and provide more products at a better price. For this purpose, we have launched new collections as well, which is based on the festive season. Last year, if you remember, the customer demand had shifted a bit from festive, the buying that happened during the festive period was more for home products and easy wear products. But in the last one month, we have seen that people are preferring to buy occasion wear now and the parties and festivals, which were not celebrated a lot last year is largely being celebrated this year. So, our product preparation is moving accordingly in which the customers can buy this time and the new range that we have presented is based on the way that the customers can shop more and more from our place. 

Q: Recently you have acquired stores and assets of Arvind Lifestyle Brands Limited for Rs 130 crore (Unlimited Retail business). Can you please provide us with the details of the deal, what are the synergies and how will you fund the deal?

A: The Unlimited Stores is a chain that exists in South and West India. A month back, we announced its acquisition which was completed on Thursday, under which there 74 stores have joined our chain and we are looking after their operations and day-to-day running. All these stores were present in those cities and states, where V-Mart was not present earlier. With these stores, V-Mart has its presence in almost every state of India. In the areas where we were not able to reach earlier or were preparing to enter – seven states – we have been able to establish the presence of our stores. As far as synergies are concerned, because both chains or business formats, Unlimited and V-Mart are present in value retail due to which the synergies are good from a customer acquisition basis as well as buying of the product and consolidation. We are working to bring these two chains together in the next six to twelve months and the process of integration of the two businesses is going on. We expect that in a year or two, we will be able to bring the operational efficiency of these stores equivalent to the V-Mart. 

Q: Recently the Company has done QIP (Feb 2021) of Rs 370 crore. Where has the company used the fund?

A: We had three big objectives behind raising the funds through the QIP and they were 

(i) We were supposed to improve our logistics infrastructure a bit for which we are setting up a new warehouse near Gurugram and we have bought a land parcel for the purpose and work has started on it. 

(ii) Store expansion and we are working on it and we have already launched 11 stores this year and these 74 stores of Unlimited that we took in South India is also a part of the same. The pace of our expansion will be continued as per the objective of the fundraising.

(iii) Digital expansion under which we were supposed to strengthen our online presence further and enhance the digital infrastructure and digital capability of the company further. 

We are working on all these three objectives and their benefits can be seen from the next year.