Future Lifestyle Fashions (FLF), a soon-to-be listed company, which houses the de-merged fashion businesses of Future Retail (Central, Brand Factory, aLL, Planet Sports) and Future Ventures shared its growth strategy and expansion plans. FRL will hold 20% in this company. While management is fairly aggressive and optimistic about its growth strategy and expectations, we believe execution would hold the key to successful implementation of these plans.
Aiming for ~20% y/y sales growth in FY14, the management remains fairly upbeat on the growth outlook for the retail formats and own brands sales. SSSG for retail formats in June’13 qtr stood at 11.4%. FY14 standalone revenues are expected to be Rs31bn, of which ~Rs6bn would be contributed by third party distribution channels. For FLF’s largest selling own brands (Lee Cooper, John Miller, Bare, Indigo Nation, Rig), ~60-100% of sales are from own distribution channels. Own brands account for ~1/3rd of sales
Store Expansion
As of June’13, FLF had 3.81mn sqft of retail space across 57 cities. FLF targets to add 0.9mn sq ft over FY13-15 (implying 24% growth, 0.5mn in FY14 itself) across its key formats – Central (9 new stores, 0.79mn sqft) and Brand Factory (5 new stores, 0.11mn sqft).