Almost all the major footwear makers have reportd -ve to flat Yoy quarterly sales growth. Redtape reported about 12% . What is enabling them that? How do we trust the numbers reported by Redtape?
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Red tape is not now only footwear company but it’s now becoming fashion company, just wisit it’s store and you understand
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May be you have visited a store and collected some data. The only way it could be right is they should be selling more of the other products than footwear. Is that what your learning from visiting the stores is?
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As @hakim_yamin rightly said Redtape is not just a shoe company anymore.
Revenue mix -
It isn’t necessary to sell more of other products to create an alpha. In certain cases, when a company has a better price-to-value proposition than its competitors, it generally tends to do better.
Although I currently don’t hold an investment in Red tape as I could coincidentally see the slowdown coming, the long-term story is intact.
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Red Tape sells more than shoes in their store. It leads to better sales/sq ft, Sales/ employee. The software costs, interior costs are also shared among more than on segment of products
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Thanks where did you find this chart? I invested just before the demerger and I have made decent money here and have sold 50% of my investment. But I am getting more and more suspicious about the numbers being reported here. It is not the market leader in anything and still growing more than market leaders make me to revisit my thesis. If they were to keep doing well, I would be a beneficiary.
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As disclosures are very less for the company, tried comparing financials to understand better
In terms of YoY growth, red tape stood out post trent
WC as a % of total assets is one of the highest for Red Tape, after monte carlo
Working Capital Days breakup is as follows – taken on basis – different denominators. Trent has best in class WC days and inventory turns
Cash Flow conversion for red tape is poor
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Sorry for asking this question so late. What is the price apportionment for the demerger of Redtape from Mirza International that happened last year? As per the BSE announcement, it was 1:1 share allotment. So do we halve the purchase price of Mirza International to arrive at the purchase prize of Redtape?
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20230324-40
Would appreciate if anyone who attended the AGM can share any highlights.
AGM Recording seems to have been uploaded by the company
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One key takeaway from AGM is that the company is expanding its SKUs with performance shoes category for various sports activities.
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Went through their online portfolio as well as visited some stores. I’m a bit worried that they are explicitly becoming a discount store.
While I do agree that other good brands(Nike, Adidas) also use this in India but I don’t see non discounted products at all. Without premiumization there can be 2 big issues :
- Brand being looked as a discounted product brand only - might have negative connotations attached about it in the minds of people despite being a good product(eg Tata Nano being linked as a “lakhtakiya”/non rich product)
- Pricing power being taken away from the brand if the customers have an anchoring bias in their minds.
Does anyone have any insights on if they are planning to try and premiumize their offerings or at least have a fresh stock of non discounted products so that not every red tape shoe is discounted at 80% ?
Disc : invested and part of top 3 holdings.
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Every other brand is using a Discounted strategy nowadays. It’s a FOMO for marketing. As far as the brand image is concerned they fit into middle low and super brands. That’s a good strategy for long term though
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Shouldn’t the lack of investor presentations and concall transcripts be a huge red flag??
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Company will be posting results on 12th February - are you guys expecting anything positive ?
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This company looks interesting. However, the lack of management’s intent to discuss progress with shareholders is unwelcoming.
I have just gone through the AGM recording posted on this thread. There was minimal information on the business during Q&A. The participants asked about CSR policy, female workforce participation, footwear R&D, etc. with negligible content on the business model, unit economics, store growth, etc. This didn’t seem well to me. At 51:55 seconds on the video, someone switched on the camera to ask a question and that guy was sitting in a Redtape store !!! And he asked about the company’s e-commerce policy.
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