Relaxo Expects To Grow Faster Than Industry Even As Slowdown Hurts

Relaxo Footwears Ltd. saw its growth cool amid the ongoing consumption slowdown, but the maker of Sparx shoes expects growth to rebound eventually as consumers will continue to shift to branded options as incomes rise.

Revenue of the company that also makes Flite flip-flops and Schoolmate shoes rose 8 percent year-on-year in the quarter ended December. That, according to Ramesh Kumar Dua, managing director at Relaxo, compares with the average growth of 12 percent in the past, in line with the industry average.

Relaxo targets to grow at 15 percent in the coming years, Dua told BloombergQuint in an interview. Per capita consumption of footwear in India, which has been quite low, is also increasing, he said, adding that brand preference, premiumisation and better products are helping the industry to grow. The market could reach Rs 75,000-80,000 crore by 2021, he said.

Given the opportunity, Dua said the company will expand its distribution. “There are more than one lakh multi-brand shops and we are present in 40,000 of them. Maybe in the next five years will reach 60,000-65,000 stores,” he said. “The low-priced products in the range of Rs 150 to Rs 200 require our multi-brand outlets. There we get more penetration and more sales.”

Key Highlights From The Interview

• Around 80 percent of Relaxo’s revenue comes from multi-brand outlets, which are part of the company’s distribution network.
• E-commerce portals contribute only 8 percent to the company’s sales.
• Branded will continue to grow better than unbranded articles.
• Exports contribute about Rs 100 crore, or about 4 percent, to Relaxo’s sales.

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WATCH | Relaxo MD Ramesh Dua on how the consumption slowdown is affecting India’s footwear industry