This is the same in physical stores as well
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We can do a simple exercise. Browse any ecom website for any good brand shoes , say Adidas, Nike, Reebok, Sketchers, you name it. See how many of their items are being sold at discount to listing price vs how many are being sold at quoted price. We will get the answer on how market is structures. My observation is, almost all brands are selling at huge discount vs listing price. I guess, numeracy is high among Indians, compared to, say Europeans/Americans. So even with all this jugglery on listing price and myriad discount %ages we are still able to figure the relative cost vs perceived quality of the product. IMHO we shouldn’t try to read much on it.
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The only differentiating factor here is that discounts in these brands are usually offered on old stock, New arrivals rarely have any discounts, unlike Redtape. But I am very sure these brands make most of their sales when products are discounted. Aspirational value plays a huge role in premium fashion brands like Nike, Adidas, Skechers, etc… you can’t compare Redtape to such brands.
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Exactly my point, Redtape can’t be compared to these brands in aspirational value. Yet those aspirational brands get most of their sales
Then, how can Redtape be expected to buck this trend of the market ?
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Basically, im from a textiles background. And from experience, i can tell you that the way REDTAPE is going, i don’t think even 1000rs per share is expensive.
They are hitting all the right things.
Coming to the physical store discounts, yes, there are many products at 70 & 80% off. but i know what the cost price is of these products. They are selling a Tracksuit for Rs 900, whose Cost Price is 600.
They are using economies of scale and also products. where they dont offer discount have huge margins.
Slowly, they will take off this discount once people are used to their products.
They are building a VERY STICKY brand recall in my honest opinion.
Disc; Biased & Invested
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All brand giviing same discount so , I thing this not a Big matter.
hello
can anyone let me know what is the cost of acquisition per share for redtape ,so that i can manually enter the price. for capital gain calculation purpose
Cost of Acquisition(% cost price of old Mirza International) 58.53% for Mirza International New and 41.47% for Red Tape
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Thank you @RajeevJ and @mahes0111 for sharing the AGM notes, super helpful. Just wanted to check if management has given out any growth or EBITDA guidance for the next 2-3 years. Thanks once again!
I feel the shoe quality is not that great. I bought a Puma shoe for 1400 and a Red tape one for 1200.
I wear them on alternate days. After about 8 months Red tape one has already started showing the signs of wear and tear while the other one is still going strong.
Any experience of the other members with the product quality?
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Wearing them on alternate days…… that’s taking R n D to a different level altogether! Thanks for sharing your experience.
I too ordered a pair n felt the cushioning could have been a bit better. I guess product improvement is a continuous n on going process n perhaps not the toughest part of the business. Their designs though seem to have caught the fancy of the younger generation.
I have also tried their garments n found them top notch n priced competitively.
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Redtape Q2 numbers are below market expectations but are impacted by the shifting of the festive season by about 20 days, pushing a part of the sales to Q3. The mgt could done better by clarifying this. Diwali last year was on around Oct 22-24. Despite that, the Sales have grown from 306 to 325 crs with operating margins going up from 15% to 18%
Q3 numbers should hopefully make up.
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Pardon my ignorance but I don’t think they shared any presentation or had concall in Q1, the first quarter post demerger.
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The huge drop in sales for Campus makes me believe it’s because of shift on festive sale.
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Steep fall like this usually don’t augur well technically.
Wondering why? Didn’t study, just going by Screener.
I have been closely tracking red tap on each and every online store as well as off-line. I see huge demand of shoes and clothes. Despite yesterday‘s results which in my opinion are not bad because festive season shifted as well as they are more than last quarter of last year. I use this opportunity to invest more in this wonderful stock. By the way fox asking for not much information available you don’t know how Mirza International works. they generally have been silent performers
Even if we assume it’s bcs festive season shifting to the next quarter.
Results are flat even if we compare them with Q1 of the last year. It might be the case of in general slowdown compared to last year as peers too had similar result.
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Based on my understanding, Redtape imports clothing range from Bangladesh ( if any member has information please correct me). Recently, came across a news article where minimum wage demand has been increased by almost 100%. Not sure if this wage increase is applicable to all the textile workers. This could result in increase in cost for Redtape and put pressure on margins. Let’s see how the management deals with this situation.
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ICICI Prudential Mutual Fund has added a further 7,60,100 shares of Redtape Ltd. during the month of November 2023. Mutual Funds are now holding about 6.85% stake in the Company.
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Few positives for the co.
- One of the best in the industry in growth and ROCE
- Price corrected a bit as Q2 result was not good. Reason is the shift of festival to Q3 (as per other co managements). So, Q3 should be good YOY
- One of the cheapest value in Footwear space
- Global Footwear industry is growing at 12% and Indian industry to grow at >20% in this decade. So, the valuations of the Footwear cos will sustain
Negatives:
- Most of Footwear is imported from Bangladesh (If memory serves right). Recent increase in minimum wage hike will impact the gross margins
- Increasing competition in this space as it offers high growth and valuations are high. (Everyone went into paints sector as the by investing 5000 cr you can make 500 cr PAT and at 50x valuation would valued the co at 25k marketcap). Whatever happened in paints may repeat but as of now no brand launches from Big conglomerates (JSW, Reliance, etc…) only time will tell
- In case of loss in market share to new players (Asian, Campus, etc… and some new entrants)
Disc: Holding and biased
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