Arvind Lifestyle sells Unlimited stores to V-Mart
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Q2 FY 22
- Footfalls not a correct measure since the people no more don’t visit with families/groups - way we look as is the number of bills being cut and conversion of the footfalls
- Sales back to pre-covid festive level; More chilly winters in the North that augurs well for the demand
- Unlimited stores integration going really well - cross pollination; expect it to account for 20-25% of the sales & panning out as we expected.
- While the expenses have come back to pre-covid levels, sales have not (and syncs with what I see from normal Sep 19 numbers) - the next quarter is the biggest quarter and expect to see some normalisation
This also comes at a time when the fashion startup is struggling to keep up with competition from online players like Amazon, Flipkart, and Myntra. So far, LimeRoad has raised over $50 million from marquee investors like Matrix Partners, Tiger Global Management, and Lightspeed India Partners.
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V-Mart will also invest Rs 150 crore to help LimeRoad achieve profitability, it said in a statement. The listed entity currently has a network of 450 stores across the country, while LimeRoad is said to have achieved over two lakh downloads per day along with a gross merchandise value (GMV) of Rs 700 crore. GMV is a commonly used term that refers to the total value of goods and services sold over a period of time by a retail company.
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LimeRoad will operate as an independent entity under the V-Mart label and the startup’s CEO Suchi Mukherjee will continue her role.
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The sale is likely to help V-Mart strengthen its online presence through LimeRoad’s user base of five crore online shoppers in Tier II and III markets.
I belive this acquisition was bound to fail from day 1.
Limeroad was already in decline and Vmart don’t have the management capabilities to pull them out.
If one visit the site right now, you will be surprised to see similar content getting repeated.
This is more important when you are competing with likes of myntra and Amazon.
E-commerce require razor sharp focus and very detailed execution. Vmart was already sloppy with their own stores (one should visit Vmart stores and check visual merchandising).
One can clearly see the difference between the two and it will increase with time.
I believe vmart may have acquired limeroad with right intention (establish a online presence) and with right price (distressed sale) but they have underestimate the amount of effort to make it successful.
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VMART Q4FY23 Concall Summary. Management says to analysts please be patient and build your models accordingly 
Any ideas on how could you market size V-Mart’s potential customers?
Vmart is Investing for the future, More than doubled its AD Spends from 41 Cr to 86 Cr.
My view - I see some shift in demand and opportunity due to - 1. Offices opening specifically - IT Service 2. Festive time around 3. Rainy season almost in the last leg .
Disclaimer: Invested small amount. Pls do your own research and take advice from your adviser.
VMART Retail Q2FY24 Concall Summary
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Few pointers:
Mgmt strategy is to reduce offline ASPs (attract footfall + push sales volumes) and online ASPs to be higher: Slightly confused how this works as most others generally have it the other way around to get rid off stuck inventory etc.
Almost 80% of old inventory is out of system and rising payable days is reducing cash conv cycle
H1 FY24 sales > H1 FY23 sales in spite of delayed diwali + adhik mas included in FY24.
They have a slightly higher churn rate in terms of stores closures i feel, 12 last FY and 3 already current FY. Maybe the older ones are struggling due to competition. (They open new stores in Tier 3 under exposed cities)
Opened 57 stores prev FY, target of another 50 this FY. Could be interesting if they can sustain this pace, doubtful though.
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