Sales slump for Manyavar & Mohey's parent Vedant Fashions
Mumbai: Fewer wedding dates, subdued consumer sentiments and increased competition from newer players wiped off nearly $2 billion from
Vedant Fashions
'
market capitalisation
over the past five months.
The company behind
Manyavar
and
Mohey
said competition in India's ethnic segment is at a level never seen before and is not sustainable with the number of stores trebling over the past two-three years. The biggest ethnic wear brand posted 2%
revenue growth
last fiscal, while same store sales growth fell 4% in FY25 as well as the quarter ended March.
"We have certainly witnessed competition in the last two decades of us operating this brand. Nothing at these levels, for sure. We have not seen these many stores ever opening up, because it has all happened in a very short period, the last two to three years. Earlier as well, when there was competition, there were a few stores here and there, but nothing at this scale," said Vedant Modi, chief revenue officer at Vedant Fashions, at its earnings call.
The market for occasion wear was historically serviced more by local shops or made-to-order ones, but over the past decade brands such as Manyavar,
Mohanlal
and more recently Tasva and Ethnix by Raymond entered the segment.
"Typically, what we have noticed is people open up a single store in a city and do decently well. And as they sort of scale up to a state level, to a region level, that's when things start to go south. This industry must understand the hack of understanding consumer preferences and understanding data at a very deep pin code level, because what works in one part of the city does not work in the other part of the city," said Modi.
According to management consulting firm Wazir Advisors, the apparel and accessories market in India was estimated at $75 billion in FY23, and the total
ethnic wear market
represented nearly 30% at $22 billion. Within that, the ethnic menswear market was estimated at $2 billion in FY23, just 10% of the total ethnic wear market, indicating the potential upside. Of the total ethnic wear market, wedding and celebration wear accounts for 58% and men's contribution is 12% of the segment. Hence, wedding and occasion wear dominates the men's ethnic dress collection and is relatively high on branded quotient.
Historically, the celebration wear category is the least impacted by slowdowns as Indians like to celebrate weddings, festivals and other occasions as lifetime events. But Vedant Fashions has had a tough year thus far, which it blamed on minimal wedding dates and weak performance, especially in Andhra Pradesh and Telangana, where the company has higher presence compared to peers.
"If I give you an example of a city like Raipur, we used to have one exclusive brand outlet which we operate. And maybe another 25, 30 stores would have opened in that market. And if we look at the financial data of all these numbers of stores opening, hardly any of them are at a mark where business is sustainable even in the mid-term. So, certainly there is a lot of macroeconomic pressure which we have seen," Modi added.
Analysts said Vedant's fourth quarter performance was underwhelming on revenue delivery despite low base and wedding season tailwinds.
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