MUMBAI, 2nd FEBRUARY, 2022 (GPN): As per a CRISIL report, Kolkata headquartered, Vedant Fashions Limited (VFL) is the largest company in India in the men’s Indian wedding and celebration wear segment in terms of revenue, OPBDIT and profit after tax for the FY2020.

VFL offers a one-stop destination with a wide-spectrum of product offerings for every celebratory occasion and is a market leader in the Indian celebration wear market with a diverse portfolio of brands catering to the aspirations of the entire family. VFL designs, manufactures, procures and markets a wide portfolio of ethnic and celebration wear apparel across multiple brands owned by them.

VFL’s flagship brand Manyavar is a category leader in the branded Indian wedding and celebration wear market with a pan-India presence and is in the mid-premium price range with a comprehensive product portfolio. For Manyavar, VFL does not offer any end-of-season sales or discounts. The product portfolio consists of Kurtas, Indo-westerns, Sherwanis, jackets and accessories.

Twamev, launched in 2019 is the premium brand and Manthan, launched in 2018 is the value brand in men’s Indian wedding and celebration wear market.

Mohey, launched in 2015 caters to the women’s ethnic and celebration wear market with a product mix including a range of lehengas and sarees. Mohey is the largest brand by number of stores as of FY2020 as per CRISIL in the women’s Indian wedding and celebration wear market.

Mebaz is a south India-focused celebration and wedding ethnic wear brand acquired by VFL in Financial Year 2018, Mebaz caters to men, women and children with a mid-premium to premium price offering, has a strong presence in the states of Andhra Pradesh and Telangana, and provides a ‘one-stop-shop’ for the ethnic celebration needs of the whole family.

VFL operates a multi-channel retail distribution network across India and sells products through franchise-owned exclusive brand outlets (EBOs), multi-brand outlets (MBOs), large format stores (LFSs) and online platforms, including website (www.manyavar.com) and mobile application.

It also sells products in overseas markets through EBOs and online platforms. VFL opened its first EBO in Bhubaneshwar, Odisha in 2008, and as of September 30, 2021, had a retail footprint of 1.2 million square feet covering 535 EBOs (including 58 shop-in-shops) spanning across 212 cities and towns in India, and 11 EBOs overseas across 8 cities internationally in the United States, Canada and the UAE, which are countries with a large Indian diaspora.

VFL is asset-light in respect of plant, property and equipment which enables it to achieve a high return on capital employed, primarily due to the nature of sourcing and manufacturing operations, with a substantial majority of sales being generated through franchisee-owned EBOs. In Financial Year 2021, over 90% of the Sales of its Customers was generated by EBOs, with over 6% by MBOs and shop-in-shops, over 1% by LFS and over 2% by online channels.

As a result, VFL does not need to invest in developing manufacturing facilities or a distribution system and by using economies of scale, is able to optimize several costs such as production and procurement costs, distribution costs and employee costs, thereby leading to improved profitability.

The success of VFL’s franchisee-based model is proven by the fact that approximately 73% of its franchisees had operated stores for three or more years, and 65% of the Sales of its Customers by its franchisee-owned EBOs was derived from franchisees having two or more stores, as of September 30, 2021.

Through its network of over 300 franchisees, VFL has a track record of commanding a high initial capital commitment from its franchisees and in return, provide all necessary support in connection with identifying and approving potential locations for new stores, managing multi-channel advertising on a national and regional basis, store development and inventory management, management of the supply chain and provide detailed training programmes for store staff and franchisees.

Technology is at the forefront of VFL’s operations and is essential to it being able to attain operational efficiencies in sourcing, manufacturing, distribution and sales processes and delivering an enhanced retail experience to its customers. Most of its business operations are system-driven with limited manual intervention.

VFL utilises data analytics for capturing and analysing evolving consumer preferences and purchase trends across the country, and has developed a strong expertise and understanding of consumer preferences across India.

Through its technology platforms, VFL monitors and manages store inventory levels on a real-time basis and integrates the stock and supply chain with the production cycle.

VFL’s back-end production processes, including supply chain and inventory management are data-based and algorithmically managed with every stage system-driven, including the procurement of raw materials, manufacturing (on an SKU-identifiable basis), warehouse inventory management and store replenishment (including new store opening fill). As a result, VFL has a record of every product sold at its franchisee-owned EBOs and is able to maintain  synchronisation between store inventory, sales and billing cycles from each store.

Ø  VFL’s algorithm-based inventory management system provides it with a real-time view of inventory levels at franchisee-owned EBOs, allowing it to effectively monitor and manage it and minimize dead stock. As a result, they have visibility of the products as they are sold at stores, and it synchronises inventory levels at stores and warehouses periodically.

Ø  VFL’s centralized and system-driven supply chain is integrated with its sales network, thereby allowing it to calibrate procurement and manufacturing processes to relevant changes in consumer preferences and trends. This generally results in lower levels of obsolete and dead stock.

Ø  VFL maintains a large network of vendors from whom they directly procure the fabrics used to manufacture products. As of September 30, 2021, VFL had over 458 vendors registered on its vendor portal. All orders placed by VFL are based on internal demand projections, carried out in advance of the estimated delivery date of the final product.

Vedant Fashions’ Strengths v  Market leader in the Indian celebration wear market with a diverse portfolio of brands catering to the aspirations of the entire family v  Large and growing Indian wedding and celebration wear market driven by an increased spending v  Differentiated business model combining the strengths of retailing with branded consumer play v  Omni-channel network with the seamless integration of online and offline channels v  Technology-based strong supply chain and inventory replenishment systems driven by systemwide data analytics, strong processes and longstanding vendor relationships v  Experienced and professional founder-led leadership team.

Vedant Fashions’ Strategies v  Expansion of footprint within and outside India Between FY2016 to FY2021, VFL increased EBO retail space footprint from 0.50 million square feet to over 1.1 million square feet, and aims to double national footprint over the next few years. v  Scaling up emerging brands through increased up-selling and cross-selling initiatives Achieve an increase in order value by up-selling Twamev products to Manyavar customers who may be looking for a premium offering, or cross-selling Mohey products at Manyavar stores v  Enhancement of brand appeal through targeted marketing initiatives   v  Significant potential for growth of its emerging brands plans to develop and grow Mohey brand to achieve a leadership position in the women’s ethnic and celebration wear market v  Disciplined approach towards acquisitions – Aim to acquire other brands opportunistically, with the goal to increase customer base and market share.

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