Fabindia

Leading Consumer Lifestyle Platform Focused on Authentic Craft-based and Organic Products

The company is positioned as a consumer lifestyle platform focused on authentic, sustainable and traditional lifestyle products. Its brands 'Fabindia' and 'Organic India' focus on 'Celebrating India' and 'Healthy Conscious Living' respectively, offering products rooted in Indian culture and craftsmanship. The company has leveraged this positioning to become a lifestyle platform offering a comprehensive range of products including apparel, home and lifestyle, personal care and organic foods.

Positioned to Address Growth in Demand for High Quality Indian Lifestyle and Organic Products

The company is uniquely positioned to capitalize on emerging trends in the ethnic apparel, home decor, and organic food markets in India. The branded ethnic apparel category is expected to grow at 15.8% annually between FY22-26. The organic food market is projected to grow at 18.1% annually to reach ₹38.7 billion by FY26. The company's existing customer base of 4.32 million serves as a ready market for future product offerings in lifestyle, food and wellness segments.

'Sustainable-by-design' Business Model which Prioritises the Interests of the Supplier Community

The company's business model is centered on the interests of traditional artisans (engaged through Contract Manufacturers) and farmers, aiming to provide sustainable livelihoods while retailing quality products. As of March 2021, the company had access to close to 50,000 artisans through Contract Manufacturers and over 2,200 farmers directly as of September 2021. The company provides skills development, training, and support to artisans and farmers to help scale up their operations.

Established Sourcing Base and Supply Chain Infrastructure

The company has an expansive Supplier Community with a network of clusters comprising close to 50,000 artisans from 109 districts across 21 states, and over 2,200 farmers directly from 11 districts in 5 states. This is supported by 6 regional field offices and 5 obtainment hubs for Fabindia, as well as 2 procurement centers for Organic India. The company has nurtured relationships with artisans and farmers over time, providing access to a diverse and complex supply base.

Omni-Channel Presence

The company has invested in establishing processes, teams and technologies to manage a pan-India store network and develop presence across multiple distribution channels. It sells products through multi-format retail stores, e-commerce, exhibitions and exports. The retail formats include company-owned stores, Experience Centers and franchisee-operated stores. The company also has a strong online presence through its own websites, mobile app and third-party e-commerce platforms.

Founder-led Company with a Highly Experienced Professional Management Team

The company is led by William Bissell as Executive Vice-Chairman, who has been with the company since 1994. He is complemented by an experienced management team including the Managing Director, Group Managing Director for Organic India, Executive Director and Chief Financial Officer. As of September 2021, 15% of the company's outstanding share capital was held by employees, aligning their interests with the company's performance.

Capital Efficient Business Model with Track Record of Delivering Growth and Return on Capital

The company has built a capital efficient business model, growing with minimal equity capital raised. In FY19, it had revenue from operations of ₹14,743.07 million and EBITDA margin of 23.77%. The company delivered adjusted return on capital employed of 43.42% and 26.46% and adjusted return on equity of 17.18% and 8.74% in FY19 and FY20 respectively. It has maintained a balance sheet with limited leverage, allowing consistent investment through recent disruptions.

Impact of COVID-19 Pandemic

The COVID-19 pandemic has had, and may in the future continue to have, a material adverse impact on the company's business, results of operations, particularly on the ability or desire of customers to visit the company's stores.

Brand Value and Reputation

If the company is unable to maintain and enhance the value and reputation of its brand and/or counter any negative publicity, the company's business, results of operations and financial condition could be materially adversely affected.

Adapting to Industry Trends and Customer Preferences

If the company is unable to anticipate and respond to changes in the industry trends, particularly in fashion, and changing customer preferences in a timely and effective manner, the demand for the company's products may decline, which may have an adverse effect on the company's business, results of operations, financial condition and prospects.

Procurement of Raw Materials and Finished Products

If the company is unable to procure raw materials, finished products and packing material of the required quality and at competitive prices, the company's business, results of operations and financial condition may be adversely affected.

Past Financial Losses

The company has incurred losses in the past, which may adversely impact its business and the value of the Equity Shares.

Competition from Online Retailers

The growth of online retailers may create pricing pressures, increase competition, and adversely affect the company's business, results of operations and financial condition.

Customer Retention and Growth

If the company fails to attract new customers, retain existing customers, or maintain or increase sales to customers, its business, financial condition, results of operations and growth prospects will be harmed.

Expansion into New Markets

The company may be unable to grow its business in additional domestic or international markets, and its inability to effectively manage or expand its retail network may have an adverse effect on its business, results of operations and financial condition.