Vedant Fashions Ltd Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gaurav Jogani - Axis Capital Limited - Analyst : And good job done on the margin front despite the sharp decline in the turnover. So my first question is with regards to the network expansion. In this quarter, we have also seen not only the absolute store network going down, but we've also seen some cities also being closed. So in that context, I wanted to understand, one, whether that -- these cities -- we entered these cities quite earlier before the evolution? And the second question with related to this is, are there further store closures planned in the coming quarters ahead?

Question: Gaurav Jogani - Axis Capital Limited - Analyst : Got it. And the next question is with regards to how the season has been panning out, especially Q2, given the fact that this time around we have around six to seven wedding days in Q2, which normally, there are no wedding days there. So that is one. And the other thing is the update on the new brand that -- the new festive brand that you were planning to launch. Any updates when can we expect that?

Question: Gaurav Jogani - Axis Capital Limited - Analyst : Just a follow-up on this one, the festival brand. So will it be mostly an online and an MBO-led brand? Or will it be also launched in some of the EBOs?

Question: Sameer Gupta - IIFL Securities Limited - Analyst : Sir, firstly, on the wedding dates part in 2H. Now when I look at these various sources available online, I see there are a total of around 45 wedding days in 2H, and this number was roughly around 42 last year. So is it just the difference of three days which is exhibiting in the confidence? Or is it also a tepid consumption environment, which was there last year and you don't foresee that happening this year? Just a little bit of clarification on this part, sir.

Question: Sameer Gupta - IIFL Securities Limited - Analyst : Got it, sir. Is there a difference in consumer behavior also, where dates are like bunched up together versus spread out?

Question: Sameer Gupta - IIFL Securities Limited - Analyst : Got it, sir. Just one more question from me. We've seen a sharp decline in other expenses, even if I call out job work, it's around a 22% decline this quarter. And a large part of this is ad spends and variable trends. So -- which would imply that you might have cut down on ad spends materially this quarter and this amid rising competition in this space. Just a color on that.

Question: Varun Singh - ICICI Securities Limited - Analyst : Sir, just wanted to understand on the number of store closures, if you can -- if you want to highlight like absolute number of stores that we would have closed, given what you understand is net closure stands at around 26, 27 in India.

Question: Varun Singh - ICICI Securities Limited - Analyst : Understood. Understood. In that context, like the retail expansion aspirations that we have of 14% to 15%, I mean, is there any change to that context on net area addition basis, if you want to highlight?

Question: Varun Singh - ICICI Securities Limited - Analyst : Got it. Understood, sir. And just one last question on Mohey, like incremental -- incrementally, how is the stand-alone store is doing? Sir, if you can give some color on that.

Question: Nihal Jham - Ambit Capital Pvt Ltd - Analyst : One question was that we've obviously exited five cities. I just wanted to get a sense from you that when you look at, say, brand Manyavar, what is the city potential that you see. Because at least say for a brand which is still 15 years old, wouldn't believe that you may need to leave certain cities. So I just wanted to get your comments on that.

Question: Nihal Jham - Ambit Capital Pvt Ltd - Analyst : Understood. And just final question on this was that in your plan for, say, the next six, nine months, what would be the approximate number of new cities that you are seeing --

Question: Nihal Jham - Ambit Capital Pvt Ltd - Analyst : I am so sorry. Am I audible?

Question: Nihal Jham - Ambit Capital Pvt Ltd - Analyst : Just a follow-up to that was that in your plan for the next six to nine months for F '25, how many more cities are you planning to enter into, if you have that at this moment?

Question: Tejash Shah - Spark Capital Advisors (India) Private Limited - Analyst : Just one question on competitive landscape, I believe you briefly touched upon competition from unorganized. Just wanted to know how the competition from organized segment is shaping up and what's your read of being that competition around for at least a year now?

Question: Tejash Shah - Spark Capital Advisors (India) Private Limited - Analyst : Okay. And just one question, it's more of a seeking an insight from you rather than a question. We have seen it in Tanishq journey of last 20-odd years that when we opened very large stores initially, consumers were daunted or it was intimidating for at least upper middle class to step into the store. When we are consolidating our smaller stores in fear of large stores, what is your observation? Is this -- are you thinking that there's a marginal customer who is not coming because he is not used to such larger stores?

Question: Archana Menon - Morgan Stanley - Analyst : Just a few questions from me on the store closure part. Firstly, do you think -- while I understand the shift because of the demand environment, do you think for the full year you will still maintain the 15% to 17% retail area addition that you usually do? The second point to the store closures also, how does this impact the franchisee level relation. Are these the same franchisees who have opened stores in the larger towns? Also, would there be any inventory write-down that you would need because of this?

Question: Archana Menon - Morgan Stanley - Analyst : Understood. And on the inventory write-off?

Question: Archana Menon - Morgan Stanley - Analyst : Got it. Just one final question from me. Just a bookkeeping number. Would you have an update on the number of franchisees or share of revenue from franchisees who have more than, say, two stores?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : My first question is on Mohey. So what is the EBO rollout plan for this year?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : What is the EBO rollout plan for Mohey brand?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : Okay. And in terms of composite stores, in how many stores you would be present today?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : Okay. And there -- are there any plans to add more in existing locations?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : Okay. So out of total square feet addition, 40% was towards Mohey?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : Got it. And second, I just wanted to understand, out of the total network, what percentage of network would be on COCO or FOCO, where we would be paying the rent?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : Got it. Got it. And just lastly, on A&P and pricing. So is there any pricing change you would have taken this year?

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst :

Question: Chirag Lodaya - ValueQuest Investments Pvt. Ltd. - Analyst : Right. And just lastly on A&P, if you can call out the number, what was the spend in this quarter versus base quarter?

Question: Mithun Aswath - Kivah Advisors - Analyst : Just wanted to get a sense of what opportunity size do you see in Twamev because it's catering to a higher-end market? And what are the current revenues you're getting from that segment? And where you see this going over the next two to three years?

Question: Mithun Aswath - Kivah Advisors - Analyst : Yes. Also, I just wanted to understand, are the margins also higher here?

Question: Mithun Aswath - Kivah Advisors - Analyst : Right. But do you scale up plan in terms of number of stores of Twamev from currently to where you want to get to over the next two to three years.

Question: Mithun Aswath - Kivah Advisors - Analyst : Sir, last question. I really need to commend your service quality in your store.

Question: Prateek Pareek - ICICI Prudential Life Insurance Company Ltd. - Analyst : So my question is on specifically your July performance, which you've said that July has been better. And if can you quantify how has been the SSSG performance in the month of July only?

Question: Prateek Pareek - ICICI Prudential Life Insurance Company Ltd. - Analyst : Can we say it has turned positive, if not quantitatively?

Question: Prateek Pareek - ICICI Prudential Life Insurance Company Ltd. - Analyst : All right. All right. And second question is on Q2 performance. Obviously, I'm not asking for the forward-looking statement. But since this time around we've seen that the festive is a bit early. So isn't it that your performance improvement expected to improve from Q2 itself rather than hopes hinging on the performance improvement from H2? What's your sense? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2024 / 10:30AM, VEDN.NS - Q1 2025 Vedant Fashions Ltd Earnings Call

Question: Sabyasachi Mukerji - Bajaj Finserv Asset Management Ltd - Analyst : I have a question. Just to understand a bit more on this wedding dates, how spread out it is or how bunched up they are and its effect on sales and consumer behavior. I presume we have around the bride plus groom sales about 45% odd, with the non-groom sales is about 30%, 35%, and balance, 20%, comes from about festivals. So just to connect the dots. Let's say, if the wedding dates are bunched up, then the non-groom sales go down, that 30%, 35% sales go down because people are probably not able to attend more weddings because multiple weddings are happening on the same day. And hence, it is better to have a well spread out marriage season rather than a bunched up season where sales might -- from our prospective sales might get impacted because our non-groom, non-bride sales get impacted. Is that a fair understanding or --

Question: Sabyasachi Mukerji - Bajaj Finserv Asset Management Ltd - Analyst : Okay. Okay. So just a follow-up to this is -- when you say that -- when wedding dates are bunched up, then people turn out in the store and there is obviously a capacity constraint. Maybe at this particular time, a store of yours can't hold a certain number of people more than that. And that is why we are probably opening up larger store. Is that the thought process? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2024 / 10:30AM, VEDN.NS - Q1 2025 Vedant Fashions Ltd Earnings Call

Question: Sabyasachi Mukerji - Bajaj Finserv Asset Management Ltd - Analyst : Got it. Got it. Very clear. Lastly, on the July trends that you mentioned that Tier 2 and 3 has somehow come back in terms of wedding sales and all. Any more color on this? I mean compared to Tier 1 or metro, how good the Tier 2 or 3 sales have been in July?

Question: Mithun Aswath - Kivah Advisors - Analyst : I was just trying to commend you on the service quality is there amongst your stores, they are much, much better than their competition. I just wanted to understand how do you maintain that service level amongst your staff, which is homogeneous across your stores. Because I've tried to do a survey amongst your competition as well, you still stand out quite a bit. So -- I'm just saying that is a big differentiator. How do you maintain that? And do you see some stress because of people being poached? Or -- just wanted your thoughts on that. I just wanted to understand.

Question: Mithun Aswath - Kivah Advisors - Analyst : Yes. I'm just trying to understand how do you maintain that? How do you monitor this -- that consistency? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2024 / 10:30AM, VEDN.NS - Q1 2025 Vedant Fashions Ltd Earnings Call

Question: Sameer Gupta - IIFL Securities Limited - Analyst : Sorry. Sorry. I was on mute, sorry. Thank you, everyone, for participating in this call. I will just hand over to the management for any closing remarks that they have.