Raymond's renovation program involves improving the physical infrastructure of a store, revamping the product portfolio and improving the service offering. Post-renovation, these stores have grown at greater than 20% on a same-store-sales basis. In some cases, the company decided to shut down the store.
The management expects investments to continue in the near future: Raymond will be investing in its apparel business over the next two-three years. The company will open new stores to scale up its presence (payback period of about 4 years), spend on advertising to strengthen the positioning of its brands, and improve its distribution network. In the medium-term, the management expects operating margin to expand as fixed costs decline as a proportion of revenue.
Raymond’s brand portfolio comprising Park Avenue, Raymond, ColorPlus, and Parx has been growing across all retail channels. Formal brands have grown at a faster rate than casual brands, while gross margins have been steady at 50%.
