Promoters including IIF overseas might be selling to reduce the debts of IIF which is likely to be merged with Brand Concepts. Hoping that the merger will be done transparently & at a fair valuation as IIF is low margin & still loss-making business. In overall BC business looks promising in luxury segment and NextGen aspiration will lead the growth going forward.
disc: holding 3000 shares from 320 levels
Thanks for the info
Have capital issues , will add in sip mode in future for more allocation
I think we should tag @Vivek_6954
He is invested way before us as mentioned in his own portfolio post
Contributions of senior Valuepicker investors will be great
Q1FY24 Concall highlights
• Revenue 58Cr (82% YOY), EBITDA 6.5 Cr (65% YoY) PAT 3.1 Cr ( 90% YoY)
• Merger with IFF (parent company) from April 2024, turned profitable with decent EBITDA margin (not disclosed)
• IFF Revenue FY23: 48Cr, FY24 60-65Cr target
• Brand Concept supplies from IFF is ~10%
• Debt paid by IFF parent company, Balance sheet is cleaned
• Long term goal -want to manufacture inhouse to control supply chain
• New division starting- PMS (Product Management Service)- to provide services to other brand for Designing Product. Want to reach out to other brand which can’t be onboarded.
• Vision for 5 years- 30-35% CAGR growth for next 4 years (500 Cr Revenue in next 4 years i.e 3X in 4 yr)
• FY24 - Guidance 35% growth, high growth of Q1 will not dilute next 3Qs growth of 35%. (my estimate : 235-250 Cr )
• Seeing good response for the new brands- Supplied 68K bags to supplier so far
• Q3FY24 end- UCB and Aeropostale product will be launched fully
• West Kolkata TH store closed due to contract issue with Mall. Looking for alternative location
• Sales Mix- Travel-gear (Luggage, Backpack) :80%, Small Leather good (30%), Women handbag: 5-7%,
Brand Mix: Tommy Hilfiger: 80% , Other: 20%
• Trying to create different revenue stream for the company (Corporate Institution sales, Product Design services for other brands, Launching other brand product on BaglineIndia.com )
Overall all Management looked very confident about the growth prospect and clear vision for the company.
D: Holding and have been adding more. Not a buy/sell recommendation.
Worth listening a concall
The promoter sold stake one time, over a few quarters. The CEO confirmed that this was one-time and is not expected to be the case going forward. Check out the earnings call.
Please Share today AGM notes if anyone attended AGM
https://youtu.be/fXUsH3gqOdM?si=161UPG1cV_27cGEL. Ads in world has started as guided by management in last concall
Again a great set of number with 50+ percentage growth in revenue and in profit before tax , didn’t saw in net profit because of tax.
Dic.invested
The trend is catching up. As per input from a friend who visited a Bagline store recently, the Aug sales were 12 Lac and Oct sales were 15 Lac. The latest Tommy gear is selling well.
Also checked up at Shoppers Stop, the Tommy luggage was up on display to be purchased as sales promotion at discounted price.
I was reading this regarding Delsey looking to make in India.
I feel Brand Concepts can be a good contender to make for them after the success of Tommy Hilfiger suitcases.
#brand concept concall key points
*30 stores till last year added 6 store this year. going to add 4 to 6 year more in this year
*target for 2 to 2.5 year is 100 store
*good results are coming from current campain
*pace of store expention is going to increase from now
*management saw up side in manufacturing in india for luggage
*revenue online 44%
- iif dept 11cr, brand concept dept 26cr
*9% interest rate for both company
*tax rate is going to be in 25% to 31% range
*tommy is price more premium then ucb
*not going for price war and trying to not give discounts and maintain their brand value
*travel gear roll out for ucb is going to start from q4
*revenue from ucb is remain in single digit or under 10% this year
*expecting good contributation from next year
*wallets are not growing categorie but belts are doing well
*searching for new products in small leather goods
*want to reduce dependency on one brand
*85 % of revenue for tommy till last year for current year it is between 75 to 80%
*going for caps as an new product
*by spring summer their is small collect of caps is going live
*tommy contract everything is done waiting for printed contract
*new contract doesnt impact their net margin
*revenue split between brand
Ucb 3-4%, aeropostale 13-14 %,Tommy about 80 %
*As per as management ucb has a bigger revenue potential then tommy
*Current split between company owned store and franchise is 50:50
*Going forward company owned store are open in premium location rest are run by franchise model
*500 cr revenue target remain same
*Experted mix going forward between online and offline is 50:50
Concall link.
Could anyone in the forum who has invested in the business help me understand the moat of this businness?.After hearing the concalls I could understand that company sells goods in the premium segment and they want to become a house of brands, but currently are in the business of selling backpacks and luggages.How can the company constantly grow its revenue because I feel this is a kind of seasonal business and people wont be buying new luggages each time they go out and also good quality bags last long so it is not even a repetitive business.
Moat - exclusive franchise
I don’t understand the question about growing revenues. Maruti Suzuki increases revenues even though people buy cars once in 5 years. 10 years? The new incremental demand is large enough that repeat purchases are not a driver.
Follow similar companies like Group-III apparel, Arvind Fashion, etc, to understand why these businesses have growth potential.
Firstly India is a huge market .Thus along with increase in per ca-pita income people tends to spend more ,thus people will fall to the never ending luxury theme .secondly ,company is adding new brands thus opening a new specific market for itself ,along with Tommy which itself is a Gem . company is constantly opening new stores at different & good location thus catering offline sales . Company is also into small leather Goods such as belts , wallets ,etc which has a growing market .Can take the business to abroad in future getting more premium . Can cater into other sku’s to increase revenue .Most imp Mr. Abhinav Kumar is what u called born for this business. Many more updates just read annual report and follow the business and do your own due diligence . And do check valuations
The company also wants to enter into the caps category. What I can understand is the company wants to build a house of brands in Fashion accessories category.
What I cant understand is if they want to add more categories than travel gear , then why it has kept it’s marketplace and store name “BAGLINE”.
I am just unclear as to what they want to build out?
Quickly looked at this business over the last couple of days and finding it difficult to understand the investment rationale here.
They don’t create brands. They don’t manufacture. The business is mostly running on the one exclusive partnership with Tommy hilfiger which they entered into in 2011. After 12 years tommy hilfiger still contributes 85% of the revenues for the company. Moreover this explains the low margins in the business as a big brand like Tommy will command the pricing and margins leaving almost close to nothing for Bagline.
Can you build a business in this segment on distribution alone when it has become much easier to distribute then it was 10 years ago? This explains only 3 exclusive brand tie-ups in 12 years with 2 of them in very nascent stages. For The in-house brands, branding and designs look poor and the products virtually non existent on online platforms.
Where do we see the PAT margins coming from 5 years down the line? All of this at a valuation of 60x PE!!! Maybe I am missing something. Would love to understand the investment thesis from fellow investors.