“Most countries in this part of the world offer one-city business. Indonesia just has Jakarta. Philippines has Manila. Australia has only Melbourne, Sydney and Brisbane,” said Chaturvedi. Having worked in Hong Kong at casual apparel rival Benetton in 2005-06, he compared and said, “India, on the other hand, has large consumption centers in smaller cities for both online and offline retail. It offers 100-plus cities to do business in, like China.”
This insight on India comes even as AFL is raising Rs 200 crore to strengthen its balance sheet this year. In the fiscal, the retailer pruned its portfolio of brands and exited some, including Gap, The Children’s Place and Hanes in a bid to cut losses. In July, Walmart-owned Flipkart had picked up about 27% stake in AFL’s newly formed subsidiary Arvind Youth Brands, which owns denim label Flying Machine.
The casual and denim player, however, expects full business recovery by mid-year paced by the ongoing vaccination drive. It registered 80% recovery in the third quarter ended December driven by good festive season and winter sales.
“We want to penetrate small cities and Tier 3 and 4 towns as we noted growth in our business in these markets over last year. Covid-19 has not hit these markets,” Chaturvedi told ET.
AFL, owned by Ahmedabad-based textile manufacturer Arvind Ltd, started operations in 1993. Currently, the BSE-listed company is present through 1,200 exclusive brand outlets, 14,000 multi-brand outlets and 3,400 large format stores.