IPO-bound Metro Brands aims to utilise Rs 250 cr for store expansion

Footwear retailer Metro Brands Ltd, which is likely to come out with its initial share-sale by the end of the month, will utilise Rs 250 crore from the proceeds towards opening 219 stores in the next two-and-half years, its senior official said on Thursday.

At present, the company has 586 stores in 134 cities spread across 29 states and union territories in India. Of these, 211 stores were opened in the last three years.

It opened its first store under the Metro brand in Mumbai in 1955 and have since evolved into a one-stop-shop for all footwear needs, by retailing a wide range of branded products for the entire family including men, women, unisex, and kids, and for every occasion including casual and formal events.

Speaking to PTI, Nissan Joseph, Chief Executive Officer, Metro Brands, said the company will open 219 new stores in the next two-and-half years across the four formats -- Metro, Mochi, Walkway, and Crocs.

Apart from opening new stores, he said that the company plans to leverage its existing capabilities to increase e-commerce operations, expand revenue-generating channels and become a digitally relevant brand in the coming years.

Also, the footwear retailer is aiming to grow in allied businesses like accessories, shoe care, and foot care, he added.

The company said 69 per cent of its revenue is generated from its private brands and the remaining 31 per cent from third-party brands.

The pandemic effected the footwear industry including Metro Brands as the company's revenue from operations dropped to Rs 800 crore in financial year (FY) 21 from Rs 1,285 crore in FY20, while profit after tax (PAT) declined to Rs 64.6 crore in FY21 from Rs 160.6 crore in FY20.

To combat the covid crisis, Metro Brands has taken a slew of steps, including, shutting down underperforming stores and rationalization staff associated with such stores, which ultimately helped the company.

"Now, the overall, demand of footwear has reached the pre-COVID level, and our

online sales are also growing rapidly," the company's chief executive said.

Ace investor Rakesh Jhunjhunwala-backed Metro Brands' proposed initial public offering (IPO) comprises fresh issuance of equity shares worth Rs 250 crore and an offer of sale of 2.19 crore equity shares by selling shareholders.

Investment bankers said the initial share sale will fetch Rs 950 crore.

Through the IPO, the company's promoters will offload a nearly 10 per cent stake in the company. Post the IPO, the promoter and promoter group holding in the company will come down to 75 per cent from the current level of around 85 per cent, Joseph said.

The company filed its preliminary IPO papers with Sebi in August and obtained the regulator's clearance in November to float the public issue.