Raymond- The Complete Man

I had the opportunity to talk the management of Raymond Ltd., a retail giant in the Indian market and the leading player in menswear.

The company is now in a transformation phase since 2013. They have added excellent industry veterans across segments.

First Raymond’s strategy was more manufacturing driven, now moving to more customer centric driven roles. The company exited from home furnishings, auto furnishings and IT business to focus on core business.

There are 3 segments :

  1. Lifestyle
  2. Engineering
  3. FMCG


Lifestyle :

The lifestyle segments consists of :

  1. Branded textiles : which is 50% of the revenues. It’s a B2C model comprising of suiting and shirting. The shirting segment was launched in 2015 under the brand Raymond and it’s a cash cow for the company with mid teen margins
  2. Branded apparels : it is 24-25% of the revenue. It’s the major growth driver for the company. It consists of 4 brands – Parx, park avenue, color plus and Raymond. It’s a b2c model which is at breakeven
  3. Garmenting : it’s a b2b model making high premium suits. It’s a 550 cr business out of which 80% is exports. The margins are about 4-7%. Exports mainly to Us and Europe.
  4. Fabric shirting provider- ifs a b2b model for domestic markets.

The company has done a lot of innovation off late, one of it being Techno Smart which is odour free , offers UV protection. Within 6 months it clocked 100 cr revenue.

The company had about 20000 + SKUs and their material ranged from Rs 300 per m to 3 lakh / metre.


Services business :

*Online tailoring

The company is enhancing capacity of tailoring, and they have started the concept of online tailoring, where you can call a tailor online. He will get fabric swatches, take your measurements and deliver your suit.


*MTM services

Made to measure services where it will be tailor made exactly according to your measurement instead of standard measures.

FY17 revenues from this was 65 cr. this will  EBITDA breakeven in next 1.5-2 years.

Branded apparel :

It is 23-24% of the business which is in its investment phase , the management is just completing revamping of portfolio. Margins are at breakeven currently because ad costs are 7.5% of sales. This will stabilise to 4-5% in next 2-3 years.

The company aims to double the revenue.

Around 150 stores have been renovated.

B2B garmenting:

The Ethiopia plant was commercialised in June with a capex of 120 cr. it manufactures shirts, jackets and trousers. The capacity is 2.6 mn pieces and it has been commissioned to service US and European markets.

The big advantage here is that Ethiopia exports to Us and Europe are duty free. The govt there has provided land as well. Labour cost and power cost are 1/3rd compared to India.

The capex will be over in FY18, after which margins will start ramping up

At optimal capacity utilisation of 80% about 150-200 cr of annual revenue change generated.

The overall capex was 340 cr, going ahead in FY19 will be 170 cr.

The company wants to focus on asset light model growth.

Engineering :

The auto components business comprises of bearings , ring gears , plates etc. It is a turnaround story with ebitda margins rising from 2% to 14% from fy16-17.

The tools and hardware is at the cusp of a turnaround.


The company has a JV with JK Ansell where they now own 100% of their sexual wellness business under the brand Kamasutra.


Image result for raymond pic

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