Raymond to add 300 stores in next 12 months, says Gautam Singhania

Rural demand to pick up with expectations of good monsoon

As demand picks up from Indian consumers, Gautam Singhania, chairman and managing director, Raymond, says the company is planning to expand its retail store chain. In an interview with Dev Chatterjee in Mumbai, Singhania adds that both rural and urban demand may pick up with expectations of a good monsoon. Edited excerpts:

With two months already over in the June quarter, how’s the retail sales for the company so far?

The extreme heat in some parts of the country where half of the country was reeling from around 50 degree Celsius temperature has impacted retail demand. So, footfalls in the stores are lower. Besides, consumers are not moving freely with cash due to the elections. But this is short term. We do expect that with the early onset of monsoon, sales will pick up in the rest of the year. We are planning to add 300 more retail stores in the next 12 months from 1,800 stores now. We expect sales to pick up both in urban and rural areas with expectations of a good monsoon. Of these 300 stores, we expect 100 to sell ethnic wear. We see demand for both urban and rural, and overall, it would be in the high teens. The growth rate in real estate would be much faster.

Raymond has a separate subsidiary in the real estate sector and its sales have shown a sharp rise in the last financial year. Do you expect this trend to continue?

The redevelopment of old buildings in Mumbai has presented opportunities worth trillions (of rupees) to developers.

Almost every old building is being redeveloped into a high rise as Mumbai was made 70-80 years ago. Look at the redevelopment of Dharavi, which has presented a big opportunity for the city to transform.

Imagine the rise in demand for cement, steel, furnishings, paints and home products due to this. Each new home being constructed will lead to demand for aspirational products such as cars, new suits and clothes. Due to this, I am bullish about the country.

With the urban infrastructure now getting commissioned in the next few months like Navi Mumbai airport, coastal road and metros, the city will look different in a few years from now.  Our company is also in the real estate sector - building on affordable luxury apartments and we expect strong demand.

With a new government set to take over in the next few weeks, what are your expectations?

In the last 10 years, there has been an exponential growth in the country, and there has been phenomenal investment in infrastructure. The whole economy moved into a different space.

Due to huge investments in infrastructure, it has had an impact on all sectors — sales of auto, tyres, gasoline, restaurants and clothing have gone up.

These are all inter-linked and hence I am bullish on India. I hope the new government will take up labour law reforms which are critical for businesses. The trajectory of the economy is in the right direction.

 

Have you done any succession planning in the company?

Yes, I have but that’s not in the public domain.