10 August 2023, Mumbai
From a humble beginning as a small manufacturer of coarse woolen blankets in 1922, Raymond, perhaps one of India’s most reputable brands in the textile and apparel sector had scaled glorious heights as an international supplier of the finest textiles.
It then diversified into consumer care, realty, industrial production, and engineering, a diversification that didn’t bode well for the Raymond group.
As chairman and MD Gautam Singhania points out, the diversification didn’t fit into the vision he had for the brand, and for the past 20 years, Raymond has been busy shedding the weight by exiting the steel, cement, and synthetics businesses.
Leaner Raymond performs better
Raymond Ltd earnings for the fourth quarter of 2022-23 were sales worth Rs 21,501.8 million compared to Rs 19,581 million a year ago. Revenue was Rs 21,922 million compared to Rs 20,317.4 million a year ago.
Being debt-free - this corporate action has been initiated with the sale of its FMCG business under RCCL to GCPL for Rs 2,825 crore. The move to demerge the lifestyle business from Raymond enables it to be net debt free and will make it an independently listed entity.
As of December 2022, the company had gross debt of Rs 2,400 crore and a net debt of Rs 930 crore. The three consumer care brands sold are Kamasutra condoms, grooming brands of Park Avenue, and KS perfumes and deodorants.
What ailed the group
Pre-Covid, 2019 was not a good year for Raymond. The Securities and Exchange Board of India (Sebi) issued a show-cause notice alleging multiple securities market violations.
The allegations included failure to obtain necessary approvals for related party transactions in the JK House episode, corporate governance violation for non-disclosure of material information about litigations, and non-compliance with shareholder reclassification norms.
The pandemic brought with it more disasters as the consumer care and lifestyle divisions faced their most demanding times in decades as consumer spending tightened hard and fast.
Restructured and renewed, Raymond powered for growth
Raymond is restructuring itself into three businesses: real estate, lifestyle/textiles, and engineering. Eventually, the target is 17-20 percent EBITDA growth and a 15 per cent revenue increase. The overall group’s revenue target has been set for Rs 10,000 crore in FY24. The company also will have to separate enlisted companies - Raymond and Raymond Consumer Care.
Broadening from occasion-wear
Raymond’s lifestyle business plans to double its business size in the next five years and 2023 has been a promising year already as it saw 19 per cent growth in the branded apparel segment. Strategic work is underway to bring Colors, Park Avenue, and Raymond RTW back on track for growth and expansion.
Inclusivity; There are 300 Exclusive Brand Outlets (EBOs) between these three brands, and the plan is to increase the number to 600 by 2025-26. As the lifestyle division trio of power brands, they contribute between 60 and 65 percent to the business. The newly launched label Ethnix will also be in focus as a unique and exclusive Raymond offering.
Ethnix currently has 75 EBOs, the plan is to grow the number to 300 by 2025-26.
Raymond also wants to continue maintaining its positioning itself as India’s finest occasion and festive wear, particularly for men, it also wants to embrace that 40 percent of men’s apparel sector is casual wear, and Colors, Park Avenue, and Raymond RTW are ready to grab their share of the pie.
