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Aditya Birla Fashion sees e-commerce muscle growing

The Pantaloons parent said its investments in hyper-local, WhatsApp commerce and mobile apps are likely to grow their contribution significantly to sales

Aditya Birla Fashion Retail's (ABFRL) revenue from e-commerce grew more than two-folds across its brands during January-March 2021 because of the pandemic-fuelled digital adoption, pushing the apparel maker to estimate that its e-commerce play in the current year will outpace the growth of previous years.

The Pantaloons parent said its investments in hyper-local, WhatsApp commerce and mobile apps are likely to grow their contribution significantly to sales, according to its outlook given as part of its financial results announced on Friday.

The observations of the firm that owns Peter England, Allen Solly and Van Heusen brands come at a time when apparel retail has been one of the worst hit categories due to the pandemic. The double whammy of work-from-home, which has limited apparel buying, and localised lockdowns, which have restricted store operations, have dulled sales at physical stores.

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ABFRL saw its net loss widen to Rs 196 crore in January-March 2021 from Rs 147 crore in the corresponding quarter of the previous financial year, according to the company's results released on Friday. The firm had reported a net profit of Rs 58 crore during October-December 2020.

Revenue for the quarter inched lower to Rs 1,822 crore compared to Rs 1,832 crore in the same period last year and Rs 2,076 crore in the previous quarter.

"Store footfalls began falling with the surge in cases by mid-March in major cities. Initially, the malls were shut down in Mumbai with subsequent lockdowns implemented across Maharashtra, Delhi and most parts of the country, affecting consumer mobility and retail footfalls."

But online sales were ramped up significantly during the quarter because we strengthened our e-commerce play through our own websites and third-party channels during last year, the company said. Channels others than purely wholesale and retail such as e-commerce posted a 30 per cent revenue jump to Rs 264 crore during the quarter, it added.

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The company also did good sales in smaller towns and cities, it said in its announcement.

For the pandemic-hit full financial year, net loss ballooned to Rs 736 crore as of March 31, 2021, from Rs 165 crore a year ago. Its revenue fell to Rs 5,249 crore from Rs 8,788 crore at the end of March 2020.

ABFRL launched more than 400 new stores across businesses and formats in 2020-21. Meanwhile, it added omni-channel capabilities to nearly 1,000 stores during the year.

The firm rationalised over Rs 1,200 crore in costs during the year mitigate the impact of COVID on profitability. This was due to 98 per cent and 19 per cent reductions in rental costs and employee benefits expenses, respectively.

It also reduced its debt from Rs 2,511 crore to Rs 654 crore through a mix of operating cash flows and equity infusion.

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