Was looking at the P&L of 3 key subsidiaries of Arvind Fashion and Comparing the same with other retail fashion players for FY22-23. Though not like for like comparison ( Trent has non fashion business also, though very small. Metro also has multiple brands which might have different dynamics individually), it gives an idea regarding the key metrics to look at.
The key call-outs were :
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Margin post commission & Royalty is the key monitorable as the the difference between this and Profit before tax is more or less constant for each brand/ retailer (except PVH where it seems very low and Trent where it is high). Min 35% seems critical for a ~7-8% PBT margin
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Apart from Margin, Inventory is another key monitorable, as excess inventory would lead to higher markdown in future. Flying Machine, PVH and Metro all seem to be sitting on pretty high Stock Cover (> 230 days).
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Gross Margin for Vedant is in another orbit all together. But, unless they crack the Women Ethnic Wear market, scalability might be a challenge.
Disc : Invested.
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