V2 Retail, a leading value fashion chain in India, announced a significant expansion plan aimed at establishing itself as a nationwide player. The company plans to invest Rs 120 crore over the next three years to increase its brick-and-mortar presence from 107 stores to a massive 250 stores, as stated by Akash Agarwal, Whole Time Director of V2 Retail.
This ambitious expansion strategy focuses on Tier 2 and Tier 3 cities, mirroring V2 Retail’s historical success in these markets. 80-85% of new stores will be located in existing clusters, while 15-20% will venture into new regions like Karnataka, Goa, and West Bengal. This balanced approach ensures brand recognition while tapping into fresh consumer bases.
The expansion will be fueled by a Rs 70 crore investment in capital expenditure (CAPEX) and Rs 50 crore for working capital, all funded internally. Currently, V2 Retail boasts over 16 lakh square feet of retail space across 18 states, offering a diverse selection of approximately 3,300 apparel and accessory options.
V2 Retail is experiencing impressive growth, with same-store sales surging by 36% in the first half of the current fiscal year, building on a consistent 30% growth trend. Men’s wear remains the top category, contributing 40% of revenue, followed by a combined 25% from kids’ and women’s wear. Accessories and footwear round out the remaining 35% of sales.
The company is committed to product development, aiming to increase its in-house design contribution from 35% to 70% by summer 2025. Additionally, V2 Retail is pioneering an omnichannel strategy by utilising existing stores as “dark warehouses.” This innovative approach leverages existing store inventory to fulfil online orders within specific city limits. A pilot program is set to launch in Delhi NCR within the next 2-3 months, paving the way for a nationwide rollout.
V2 Retail closed FY23 with a revenue of Rs 800 crore, which jumped to Rs 1,160 crore in the last fiscal year. The company ambitiously targets Rs 1,800 crore in revenue for the current fiscal year and projects a compounded annual growth rate (CAGR) of at least 50% over the next five years. Furthermore, V2 Retail aims to bolster its EBIDTA profitability from 14% last year to a projected 18-19% in the coming years.
This aggressive expansion plan by V2 Retail signifies a shift in the Indian value fashion landscape. With a focus on Tier 2 and Tier 3 cities, innovative omnichannel strategies, and a commitment to in-house design, V2 Retail is poised to become a dominant force in the national market.
