Mumbai: VIP Industries chairman Dilip Piramal said a plan to turn around the country’s biggest luggage maker was slower in taking off, prompting independent director Nisaba Godrej to quit the board. He, however, reiterated that the company is on the path to recovery.
“The organisation is focused on improving its revenues and getting the brand in a better growth phase. However, we do not think we can hurry up the process of change, which is like climbing uphill and stumbling and yet getting up to continue,” Piramal told ET. He added that the company has hired global consulting firm BCG to help restructure the business.
Last week, Nisaba Godrej, executive chairperson of Godrej Consumer Products, resigned from VIP’s board citing differing views on leadership accountability and succession. However, Piramal said she felt the board needed to have a better control on its operations and undertake drastic changes including in the management, in contrast to his stance of a plan which may seem slow but focused on getting the brand in a good space.
“We also have two MDs leaving in 2021 and 2023, post which we appointed our CFO as MD last year. Nisaba has also been impatient that recovery is taking much longer. Her contribution has been invaluable and she studies an issue in great detail and is extremely meticulous. We have great respect for Nisa and the Godrej family and her views have always been highly valued by the board,” Piramal said.
A year ago, the luggage maker elevated chief financial officer Neetu Kashiramka as managing director designate after Anindya Dutta resigned citing personal reasons.
Incorporated as Aristo Plast in 1968, the promoter group led by Piramal controls nearly half of the Indian luggage market through brands such as VIP, Carlton, and Skybags. However, it has been losing out to Samsonite in the premium end and Safari Industries at the mass-end of the segment.
Experts said over the years, the market share gap between the market leader and the next set of players has shrunk in India’s luggage market.
“This is primarily on the back of multi-brand outlet reach expansion, sharper brand positioning across price tiers and alternate go-to-market approaches by challenger brands. At a lower price, conversion from unorganised to organised has driven growth which means that the right cross-over portfolio and pricing is critical to gain share,” said Rishav Jain, managing director with Alvarez & Marsal.
VIP Industries posted a 10% rise in net sales at Rs 2,215 crore last fiscal. However, net profit plunged to Rs 28 crore in FY24 from Rs 161 crore in the previous fiscal.
Luggage makers Samsonite, Safari and VIP are seeing sharp slowdown in sales growth as last year’s high base weighed on March quarter earnings amid a weak wedding and travel season this year.
