Pantaloon Retail, the country's largest retailer, is looking at increasing the prices of its apparel products up to 18 per cent, to improve margins in the coming quarters. The gross margins of the company have come down by 220 basis points in second quarter of financial year 2011 due to increase in input costs of apparel and general merchandise. There is an increase of 80 to 90 per cent in raw material prices. Even other apparel retailers such as Shoppers' Stop are expected increase in apparel prices in the next quarter.
About 80-90 per cent of apparel sold by the company in its stores comes from its private brands, which include DJ&C, Knighthood, AFL for men and women, Shrishti, DJ&C and Haute n Spicy for women. Unlike Pantaloon, nearly 85 per cent of Shoppers Stop's sale comes from national and international brands due to its positioning. While apparels carry margins of 20-30 per cent, those in private brands get up to 50 per cent.
Pantaloon also plans to hive off its electronics business Ezone into a separate company as continued promotions and increased competition hurt its margins. The new entity is expected to get strategic investors in the next couple of months.
| Company Name | CMP |
|---|---|
| Avenue Supermarts | 4687.00 |
| Aditya Birla Fashion | 265.00 |
| Trent | 4634.45 |
| Future Retail | 2.06 |
| Electronics Mart Ind | 223.75 |
| View more.. | |
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