Raymond’s Color Plus seems to be fading with high operating costs, salaries and low margins to the company itself. Additionally the company opened 3 new Color Plus stores and 10 new Raymond Apparel stores in the last quarter.
Management intends to focus more on the franchise model for expansion into Tier-II/III towns and expansion through own stores might slow down. They might also close down a few stores in malls which have not been doing well. [High Rentals Vs Moderate Returns in mall is not a viable business model] These steps should help improve the profitability of the business in the medium term.
Sales growth is expected to remain strong driven by a consumption boom in the country. We expect the company to add 100 new stores every year (including The Raymond Shop, which comes under Worsted textiles division).