Dear Fellow Shareholders
Welcome to the Provogue Annual Report for financial year 2016. Its been thetoughest year in our history and we had to take certain steps to ensure that our brandremained strong and our balance sheet was protected from a series of market forces andunexpected events.
We are still reeling from the effects of the fire in our Daman factory that wiped outour 2014 fashion collection and which had such a negative impact on our market share in2014-15. Fortunately with the support of our vendor base weve been able to rebuildthe supply chain and get ready again for the future.
The fashion market in India has changed significantly in the past couple of years. Theadvent of online e-commerce has created new challenges for the brick-and-mortar retailersas deep discounts are squeezing margins across most retail categories fashion being noexception. In addition with the global economy struggling for growth many internationalbrands have entered the market looking for market shares to prop up their portfolios.
Therefore we are realigning the business into an omni-channel model and arerepositioning the brand to a youth-focused casualwear platform that addresses the maintarget consumer of modern India. With 72% of the population under 35 and disposableincomes rising year-on-year the latent demand for branded fashion remains strong.Fortunately we have one of the most powerful youth-centric brands in the country and thiswill be our key to ensuring a strong future.
Business Strategy 2016
Against these market conditions we had to take steps to protect our balance sheet andprepare for the future. Thanks to the support of our bankers and our shareholders we wereable to successfully execute an SDR scheme that restores a strong financial foundationfrom which we can now build.
We are working on new fast-to-market mechanisms that reduce stocks in the system andrelease working capital for growth. And we are increasing our focus online to broaden theProvogue offer and become available to potential customers in every corner of the country.
We have also realigned our operations into distinct stand-alone business units that aremanaged by dedicated teams motivated to optimise results independently in their ownbusinesses.
We now operate under 4 business units as follows:
Fashion and Lifestyle: New occasion-centric collections have been developed that arecasualwear-centric and meet the needs of the youth market.
FMCG Personal Care: The Unisex Deodorants range will be supported by other PersonalGrooming ranges in Skin Care Face & Body Wash Shaving Toiletries and Hair Care.
Institutional Sales: Demand for Provogue Gifting products from Corporates andInstitutions remains strong and we continue to see high growth year-on-year.
Provogue.com: We are ramping up our online presence to build a contemporaryomni-channel retail business. We know that we must build this platform for a robustfuture.
The Provogue brand remains our major asset and the key to long-term value creation. Wehave multiple opportunities available to us and we continue to explore the best ways to dothis.
I want to thank our employees our bankers our shareholders our business partnersvendors and suppliers for their support. Together as one - we will surge ahead onceagain.