(Bloomberg) -- Raymond Ltd., one of the world's biggest producers of worsted wool fabric used to make quality suits, is cutting costs by more than a third as people shelter at home from the coronavirus outbreak.
The Mumbai-based company is reducing jobs, rents, and marketing costs to decrease expenses by as much as 35% for the financial year started April 1, Chairman Gautam Hari Singhania said in a virtual interview last week. It has also sought to freeze loan repayments under a one-time program offered by the central bank.
“Raymond has taken this as an opportunity to re-set,” Singhania said. “What we know is this is a crisis and we will stand strong.”
The shift to online engagements has slammed demand for business clothing worldwide, tipping the two-century-old Brooks Brothers Group Inc. into bankruptcy this month. Raymond, itself almost a century old having started in 1925 with a small wool mill on the outskirts of what was then Bombay, has seen its shares suffer the biggest loss among global peers this year as the virus outbreak intensified.
India went on lockdown March 25, and shops and offices in parts of the country are still shuttered. Raymond has deferred its capital expenditure such as store openings, renovations and technology upgrades, according to the company's annual report.
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For now, Raymond is using its Bengaluru factory to manufacture personal protective equipment for health workers, Singhania said. He added that the company offers a range of products unlike bespoke suit makers he competes with in other parts of the world.
“When you are a strong brand, recession always plays in your favor,” Singhania said. “Brooks Brothers provides a very specific and formal range of clothing, unlike us, so it doesn't bother us much.”
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