 "Nisaba Godrej, Godrej Consumer ProductsLtd, GCPL")
Nisaba Godrej has resigned from her position as an independent director on the board of VIP Industries, citing differing views on leadership, accountability, and succession planning. Her resignation is effective immediately, according to an exchange filing by the company on the National Stock Exchange (NSE).
In her resignation letter dated June 3, Godrej expressed gratitude for her tenure at VIP Industries.
"Thank you for having me on the Board of VIP Industries. It has been a privilege to serve, and I commend you on the open atmosphere and independence of the Board," she wrote.
Godrej also praised the company, stating, "VIP Industries is a wonderful company, a creator of the luggage category in India and the market leader, and I wish the company much success in the years to come."
Godrej, who is currently the executive chairperson of Godrej Consumer Products, highlighted her reasons for stepping down.
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"As discussed, due to my differing view on leadership accountability and succession planning, I will be resigning from the Board effective June 3, 2024," she stated in her resignation letter.
Leadership changes at VIP Industries
VIP Industries has seen a series of leadership changes in recent years. Anindya Dutta resigned as managing director in August 2023 after taking on the role in February 2021. His predecessor, Sudip Ghose, resigned in January 2021, having served as managing director since April 2018.
VIP Industries appointed Neetu Kashiramka as CEO in August 2023. Kashiramka, who joined as chief financial officer in April 2020, along with Radhika Piramal, outlined a four-pronged strategy to improve the company's performance. This includes expanding the product range, enhancing its presence in the premium market, building a stable leadership team, and improving profitability.
Leadership challenges at VIP Industries
Central to the current turmoil is the reluctance of Radhika Piramal, VIP's London-based vice-chairperson and daughter of chairman Dilip Piramal, to continue running the business, according to a report by Mint. This has led the family, which owns 51.76 per of the company, to consider selling its stake.
Godrej joined VIP Industries' nine-member board in April 2019 and was a member of the Nomination and Remuneration Committee (NRC), which oversees succession planning and remuneration of senior executives. Her departure comes amid significant challenges the company is currently facing.
VIP Industries lags behind foreign brands
Once the largest luggage maker in India, VIP Industries was overtaken by Samsonite in 2023. According to Samsonite's global annual filings, its revenue in India was $273.7 million compared to VIP Industries' $263 million. VIP Industries has faced stiff competition from cheaper Chinese manufacturers and has struggled to capture a larger share of the premium market.
In the financial year ending March 2024, VIP Industries' revenue increased by 7.5 per cent to Rs 2,256.7 crore, compared to a 58 per cent jump in the previous year. However, profit slumped by 64.3 per cent, from Rs 152.34 crore to Rs 54.30 crore. The decline in profit was primarily due to the company selling fewer bags than it manufactured and incurring costs on unsold inventory from the previous year.
