V-Mart Retail Plans To Add Over 60 Stores Annually, Says CFO Anand Agarwal

V-Mart Retail Ltd. is set to expand aggressively, adding at least 50-60 stores annually, according to Chief Financial Officer Anand Agarwal. Speaking to NDTV Profit on Monday, Agarwal emphasised the company’s commitment to sustainable growth, targeting a 10-12% annual increase in retail space.

"For the next year, that should translate to 60-odd stores, with an additional 10 stores the following year. A yearly addition of over 60 stores is the right number to consider," he said.

Reflecting on market conditions, Agarwal highlighted that the past year and a half has been particularly positive, following a post-Covid correction. "We are witnessing improved customer footfall, better consumer sentiment, and stronger throughput in numbers," he said.

"At a macro level, we still see a strong opportunity. The overall market may not be extremely robust, but it is certainly better than the last 3-4 years," he said.

V-Mart has grown at a 17-18% revenue CAGR over the last 20 years, a trend the company aims to maintain. "Our entire focus is on ensuring sustainable and profitable growth, rather than merely expanding revenue. Ebitda growth will outpace sales growth," he said.

Agarwal noted that V-Mart has achieved double-digit growth year-to-date. However, he emphasised a sustainable growth approach. "Going forward, we expect single-digit to mid-single-digit sales growth. Over the next 3-5 years, we anticipate overall sales growth in the mid to high teens," he said.

More importantly, the company’s focus remains on profitability. "While the opportunity is strong, we are prioritising profit growth over topline expansion. Our efforts will be directed towards ensuring that profitability growth surpasses overall sales growth," he said.

Addressing competition from new players and e-commerce, Agarwal acknowledged the rising intensity but viewed it as a positive factor. "There are many opportunities for all kinds of players. The organised retail segment is growing, driven by competition and market expansion," he said.

V-Mart has also ventured into online retail through its marketplace, LimeRoad.com, but Agarwal admitted challenges in sustaining profitability. "In the highly competitive low-price segment, where the average selling price is around Rs 300, running a pure online apparel business is extremely difficult. We remain bullish on our brick-and-mortar model while considering online as a supplementary opportunity.”

"Fashion may not be the most conducive category for quick commerce. However, we see potential and are working on pilot projects, especially in non-apparel segments," he said on quick commerce.