Raymond Lifestyle, the demerged entity from Raymond, plans to open 900 stores in the next three years, targeting 12-15% annual sales growth and an 18-20% increase in operating profit. The company, set to list on September 5, aims to unlock shareholder value by focusing on the lifestyle segment, driven by a professional management team. Last year, Raymond Lifestyle invested INR 100 crore to boost capacity and plans another INR 100 crore investment this financial year. The company reported FY2024 revenue of INR 6,691 crore, with a 16.3% EBITDA margin and a net cash surplus of INR 227 crore.
Raymond Lifestyle, Raymond's demerged subsidiary, intends to open 900 new stores over the next three years, with the goal of growing sales by 12-15% per year and increasing operating profit by 18-20%, according to Chairman Gautam Singhania. The demerged company will be listed on the stock exchange on September 5, and Singhania believes that trade opportunities with the United Kingdom, the European Union, and Australia, together with internal problems in China and Bangladesh, offer excellent prospects for the company.
The demerger is intended to maximize shareholder value by creating a focused lifestyle firm, allowing investors to concentrate on this specific area. Singhania added that the newly formed firm will have a competent management team with a strong focus on the leisure area. The decision comes after Raymond sold its FMCG division to Godrej Consumer for INR 2,825 crore and announced plans to separate its lifestyle and real estate operations, with the engineering section remaining with the original listed company after purchasing Maini Precision.
Singhania stated that the combined company did not achieve the intended valuations because sector-specific investors were not interested in diversified firms. With three independent organizations, each may unlock shareholder value by focusing on professional management, net cash positions, and cost and working capital optimization. Raymond Lifestyle will cover all apparel-related companies, such as branded textiles, branded apparel, and garmenting.
Last year, Raymond Lifestyle invested INR 100 crore in capital expenditures to increase production capacity to 10.7 million units. It intends to invest another INR 100 crore this fiscal year, potentially generating an extra INR 400 crore in revenue by FY2027. To improve corporate governance and boost shareholder trust, the company developed a new management team, reformed its board to include seven independent directors, and guaranteed that all committees are led by independent directors. Recently, Rajiv Sharma was appointed as a non-executive director.
Raymond Lifestyle's revenue for the fiscal year ended March 31, 2024 was INR 6,691 crore, with contributions of INR 3,449 crore from branded textiles, INR 1,587 crore from branded clothing, INR 1,035 crore from garmenting, and INR 830 crore from high-value cotton shirting. The company achieved a 16.3% EBITDA margin in FY2024 and had a net cash surplus of INR 227 crore at the end of March. Singhania remains positive about the company's growth potential, citing focused management and operational efficiencies as drivers of future performance.
This strategy seeks to generate value for all stakeholders while strengthening its position in the highly competitive lifestyle sector. Raymond Lifestyle is preparing for long-term growth by implementing a strategic strategy to expand its retail network and optimize its resources.
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