MUMBAI — Resurgent demand for big, fat Indian weddings in the wake of the coronavirus pandemic is welcome news for the country’s Raymond conglomerate, whose core business remains the dapper suits and fashionable textiles it churns out for both its own stores and other retailers.
The chairman and managing director of the South Asian company, which is close to celebrating its centenary, told Nikkei Asia that he expects a spending spree at his network of around 1,400 clothing showrooms this wedding season, which runs on and off from November through to the summer as couples look to tie the knot near auspicious dates in the Hindu calendar.
“We have witnessed a sharp turnaround in our sales due to higher consumer spending in our stores [following the COVID-19 pandemic],” Gautam Hari Singhania said in an interview. “With the record wedding season planned in the next few months, I am optimistic that this trend will continue.”
India is set to host around 3.2 million weddings in November and December, according to retail trade body the Confederation of All India Traders, which would generate a whopping 3.75 trillion rupees ($45.5 billion) of business overall for sectors including clothing retail. That compares with 2.5 trillion rupees over the same period in 2019, before the pandemic struck, and about 3 trillion rupees last year as traditional ceremonies started to return.
Set up in 1925 as a wool mill near India’s financial capital of Mumbai, Raymond originally supplied blankets to the armed forces in the country. Its name comes from two directors at the mill, Albert Raymond and Abraham Jacob Raymond.
The Singhania family bought the company in 1944, just before India’s independence from Britain, and it now has 19 factories in the country and one in the East African nation of Ethiopia. It employs over 30,000 people and, beyond its own retail network, supplies overseas companies including U.S. department store operator J.C. Penney.
In India, the company competes with multinational fashion retail chains such as Marks & Spencer and Zara, along with local textile companies like Bombay Dyeing and Grasim Industries.
Clothing and textiles continue to account for nearly half Raymond’s revenues. (Photo courtesy of Raymond)
Raymond has also expanded way beyond its core business, diversifying into consumer products ranging from shaving cream to condoms, as well as technology such as auto parts. It also runs a real estate division which builds and sells apartments on the outskirts of Mumbai.
“Our real estate sales are up three times in the September quarter when compared to the same period of 2019 before COVID and we expect this trend to continue,” 57-year-old Singhania said from the plush building in southern Mumbai that houses both the company’s head office and his personal residence. The area is home to several billionaires, with property there fetching some of the highest prices in Asia.
“We now plan to hive off the real estate division into a separate company for better focus,” Singhania said, adding that demand for larger apartments is accelerating as people working from home look for more space.
Raymond, with a market valuation of nearly 105 billion rupees, recorded its highest ever overall sales of around 22 billion rupees for the three months that ended in September this year, up 38% from the same time the year before. It expects its revenue for the financial year ending next March to beat the 63.4 billion rupees it racked up in the previous 12 months.
Inside a Raymond showroom. In India, the company competes with multinational fashion retail chains such as Marks & Spencer and Zara. (Photo courtesy of Raymond)
Clothing and textiles continue to account for nearly half the conglomerate’s revenues. Indeed, Singhania also expects a sharp rise in garment exports as Western retailers look to broaden their supply chains away from China, where strict COVID lockdowns have overshadowed production.
“We reported a sharp rise in sales in the September quarter as our overseas clients ordered more suits and shirts as they sought other suppliers apart from China,” he said.
“Despite several disruptions like the Ukraine war and rising interest rates overseas and talks of recession in the West, our export order book is full for the next six months,” continued Singhania, a renowned auto enthusiast, who set up the Super Car Club of India to restore and maintain antique vehicles.
Singhania said India can compete with other key garment-producing nations such as Vietnam and Bangladesh as it offers everything from cotton cultivation to ginning and stitching. “There is a huge potential for India,” he said.
Analysts agree that the company’s businesses have recovered sharply after the pandemic due to rising consumer spending. “Consumer demand is expected to stay strong which is expected to maintain growth momentum,” said Arti Roy, an analyst at ratings firm CareEdge. “Margins have been improved by stringent cost rationalization measures adopted despite commodity inflation and higher input prices.”
Meanwhile, Singhania is on a mission to revamp the conglomerate’s management, hiring former Coca-Cola Asia-Pacific Chairman Atul Singh as vice chairman; former PepsiCo and Cadbury India head, Rajeev Bakshi, as nonexecutive chairman of the company’s consumer care business; and Sunil Kataria from local conglomerate Godrej as CEO of the firm’s lifestyle business.
India’s colorful wedding season runs on and off from November through to the summer. © Reuters
And in the coming months, Raymond aims to open more stores in smaller towns to cash in on rising consumer spending, while broadening its clothing lines to include more traditional Indian garments — often popular during Hindu wedding rituals.
“We have noticed that each customer is now spending higher after COVID by as much as 25% to 30% in our stores when compared to pre-COVID. We are on the cusp of record growth,” Singhania said.
Source: Nikkei Asia
