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V-Mart to exit FMCG
Posted On: 03-09-2013 01:04:00 AM

As per an article in Hindu, value retailer V-Mart Retail Ltd has said it is focusing on the high margin fashion and lifestyle categories and plans to exit the FMCG category. Accordingly, recent stores launched by the company do not have a food and grocery segment. The margins in these categories are unattractive and do not justify the business.

Besides, almost 80% of the company’s revenue comes from the fashion business while FMCG accounts for a mere 16%. The company’s turnover stood at Rs 390 crore for fiscal 2013.

V-Mart had raised Rs 122 crore through an initial public offer earlier this year to fund its expansion plans. Post-IPO, the promoters hold 59 % stake in the company, while Aditya Birla Group's private equity fund Naman Finance & Investment owns 9 % stake. The rest was diluted to the public during the IPO. The company has 80 company-owned-company-operated stores largely in northern and eastern India.

The company claims to be profitable due to its business model which includes not opening stores in malls and following a cluster-approach to expansion. By ensuring that no two V-Mart stores are more than 150 km apart, the company is able to manage the supply chain and logistics better.

 
 
 

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