New Delhi: Value clothing retail chain, V2 Retail is working towards increasing its full-price sales, that is, products sold at MRP to 92 per cent of its sales, shared the company’s director Akash Agarwal in a chat with ETRetail.
Commenting on whether a further reduction in discounting will improve the average selling price for the retailer, Agarwal said, “We have increased our full price sales to 88% in last year. The target for this year is 92%. By selling at full price, the ASP increases. However, as we are increasing our volumes simultaneously, the economies of scale kick in. So, the ASP should not be impacted more than 5-10% and we want to maintain that. We are not looking to change our gross margins.”
In FY24, the retailer’s ASP stood at Rs 263. V2 Retail operates at a gross margin of around 27 – 29 per cent.
In addition to increasing its full-price sales, the company is focusing on pushing more exclusive in-house designs in its outlets to offer fresh inventory and further enhance its same-store sales.
Agarwal shared that the company sold about 317 items per minute across its 124 stores in 111 cities. In an update for Q1FY25, the retailer in a BSE filing said that it has achieved same-store sales growth of around 37 per cent as compared to Q1FY24.
While V2 Retail operates 3 manufacturing units which produce 10 lakh items per month, the retailer is betting on strengthening its vendor network to support its expansion plans.
“The capital required for manufacturing is quite significant. Thus, we will focus on vendor partners. Currently, we have around 160 vendor partners,” Agarwal said.
The brand which runs 127 stores as of June 30, 2024, plans to add 30 – 40 more stores this fiscal. Aggarwal shared that the store expansion will attract an investment of Rs 50-60 crore and an inventory of around Rs 60-70 crore.
V2 Retail’s standalone revenue from operations for the June quarter stood at Rs 414.17 crore, reporting a 57 per cent YoY growth.
