Indian fashion giant, Aditya Birla Fashion and Retail (ABFRL), has reported a 94 per cent year-on-year drop in tax-paid profit to 11 crore rupees (US$1.3 million), citing “accelerated marketing costs”.
The company recorded a 20 per cent growth in sales to 3589 crore rupees (US$435 million) for the quarter that ended December 30, mainly driven by a 33 per cent increase in e-commerce sales.
The company said the net profit drop resulted from an “about 2.3 times increase in marketing investments and strategic investments in new ventures”.
“The long-term outlook for the company continues to be positive owing to normalisation of offline businesses, the proliferation of e-commerce, continued penetration for organised and branded apparel at the back of the strength of our brands,” the company said in its filing.
Last November, the fashion company signed an agreement with Galeries Lafayette to bring the French luxury department store chain to India and open a dedicated e-commerce platform in the country. Galeries Lafayette’s two flagship stores in Mumbai and Delhi are scheduled to open in 2024 and 2025 respectively.
As of the end of last year, the company had 3848 stores and 6048 points of sale in department stores across India. Its international portfolio includes The Collective, India’s largest multi-brand retailer of international brands. ABFRL also has long-term exclusive partnerships with brands including Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21 and American Eagle.
