New Delhi: As commodity prices stabilize, high-end footwear retailer Relaxo expects to gain market share over the next 3-4 months, said Gaurav Dua, Sales and Marketing Director of the company during an interview with ETRetail.
Dua shared that due to inflation, high commodity prices and an increase in GST to 12% for shoes under Rs 1,000, the shoe market has seen resistance from the from consumers as they switch to less expensive products. More than 85% of Relaxo’s portfolio falls under the Rs 1,000 category.
From January 2021, the footwear industry started to feel the impact of inflation, he shared, adding that commodity prices had increased by 50-60%. Dua pointed out that the price of a particular raw material – ethylene vinyl acetate (EVA) has increased 3 times in nine months.
He believes that the fall in commodity prices over the past few months coupled with the price corrections taken by the brand will help him gain market share, especially for his portfolio of open shoes.
According to industry reports, Relaxo’s market share in the non-leather organized shoe category is nearly 20%.
Speaking about its margins, Dua said pressure on the company’s margins will persist for another quarter, due to price corrections it has taken.
According to the BSE filing, the company reported a 34.2% increase in net sales to Rs 667.15 crore in the quarter ended June 2022 from Rs 497.13 crore for the same quarter. Last year. Its net profit and EBITDA stood at Rs 38.67 crore and Rs 90.29 crore, respectively for the latest quarter.
Relaxo’s product range
Started with its famous blue and gray colored slippers, Relaxo today manufactures and sells Hawaiian rubber slippers under the Relaxo and Bahamas brand names; sports shoes, canvas shoes, sandals and sports slippers under Sparx; and EVA and PU liners under Flite.
In the company’s total revenue of Rs 2,653 crore for the 2021-22 financial year, its Hawaiian slippers under Relaxo and Bahamas (combined), Sparx and Flite contributed equally to the pie, Dua shared. He further added that he hopes Relaxo’s Hawaii rubber and Sparx will soon become a brand of Rs 1,000 crore each.
Asked which brands are expected to drive growth, Dua said that due to growing demand for sports and leisure products in India, footwear and sandals brand Sparx is expected to see the fastest growth.
The footwear retailer recently commissioned additional capacity for Sparx at its Bhiwadi manufacturing facility. Relaxo has a total of 8 manufacturing units located in Bahadurgarh, Bhiwadi and Haridwar.
In terms of commercial presence, the retailer is present in 50,000 multi-brand outlets and 394 exclusive brand stores. It is also present on major e-commerce platforms.