Red Tape Ltd. – The next fashion giant?

Red Tape AGM Short Notes:

Question about Geographical Expansion Plans:

Management Reply:

At present, majority of revenue comes from Jammu Kashmir, Punjab, Haryana, Himachal, Uttar Pradesh and Rajasthan.

We are now expanding in cities like Hyderabad. We’re looking to open more stores in coastal Andhra Pradesh cities like Guntur, Vijayawada, Vishakhapatnam. We are also expanding in Gujarat in a big way. And the Northeast is also something that we are toying with right now.

In the West India, In South India states like Tamil Nadu, Central India we don’t have a single shop So there is a lot of place lot of room to grow within India.

We have expanded our online warehouse, multi-fold this year, and the results should start coming out from the third quarter of this financial year. We are extremely optimistic about the future of footwear industry in India and believe that we have just started.

Question about Product Expansion Plans:

Management Reply:

We are not experimenting with any new categories as of now but next year when hopefully things get more settled down, we are planning to get into the luggage industry and backpacks and cabin sized suitcases.

Question about Competitors:

Management Reply:

In Footwear Space:

In the footwear industry, we compete with some of the lower ranges of brands like Reebok, Adidas and Puma. Lotto and Fila are our direct competitor and brands like Campus, they have certain premium ranges that also sell in the same price vicinity as ours.

In Apparel Space:

We would be competing with brands like Allen Solly and Peter England, John Players and even some of these primary label brands of Westside and Pantaloons.

we’re facing this competition is by improving the product quality, making a better product for consumers and overall giving consumers a better experience for shopping.

Question about Spors shoe market size:

Management Reply:

As per surveys done by some independent agencies, they say that the Indian sports shoe in the Indian footwear industry is around INR93,000 crores and is set to increase to INR1,41,000 crores by 2025.

The exact numbers, nobody knows, because still a very big part of our industry is unorganized. It’s slowly and slowly becoming more and more organized. So, as it gets organized, the numbers go up. So, there’s tremendous scope for growth in the future.

Question about perception of Discount Brand:

Management Reply:

Whenever they come shopping in REDTAPE, we want them to get the sweetest deal. We want them to get the best product, best value for the money. And each consumer should feel like he’s a winner. If this winning spirit is alive, that’s the DNA of our brand.

If you look at our margins, they are also highest. EBITDA is healthy. So, whether it’s 50% or 80%, this is a marketing strategy designed for making consumers buy a product. The Indian consumer mindset, unfortunately today, does not want to buy anything full price, from a car to a house, they want a discount. So this is the trend as of today. If tomorrow the trend changes, we will be flexible enough to change with the trend.