Aero Club, the maker of Woodland and Woods footwear and apparel, expects to have more opportunity this year to consolidate and regain momentum before it can align its expansion plans, Managing Director Harkirat Singh, said in an interview. Edited excerpts:
What has been the impact of COVID-19?
Businesses and the economy have been severely affected across geographies. Being the country’s leading leather/lifestyle-based retail chain, we (Aero Club) are members of almost every retail and leather association across the country. Considering this is a global issue, governments will play an important role in many management decisions as most companies will look up to the government for a contingency plan for guidance and some relief measures in line with the economic slowdown.
Is there a change in your capex plan for the current year?
I wouldn’t necessarily call it a ‘change’; it is more of a reallocation. Needless to say, owing to the pandemic, a lot of operations worldwide were put on hold and that naturally led to deferment of plans as well as investments. We have a certain revision of strategies that we plan to put into action slowly and steadily to regain the momentum we are anticipating for our brand in this year, as much as possible.
Any pay cuts or layoffs in the offing?
Every business has its own cyclical ups and down and we are proud to sail through; the situation is very tricky and beyond anyone’s control at this moment in time. Our team is our backbone and we have always supported them whatever may be the scenario and thus things like layoffs have not been on the cards. However, we have revised the number of working hours of our staff corresponding to the work load. As that picks up in line with the governmental policies, things will start coming back to normal.
You had been laying thrust on online. What portion of your income comes from that?
Online is the future and that has been learnt and understood in the last 5-7 years of the online boom that the world has seen. It’s comfortable to receive the products of your choice at your home at a desired time slot, though India is still a touch-and-feel market. While online has been growing, over 80% of our revenues are still from our offline model. However, with COVID-19, things are expected to change since markets will be less crowded. Retail therapy is almost inevitable and thus, online buying is expected to grow further especially till the pandemic is controlled.
How about your expansion plans?
Over the years, Woodland has been consistent in steadily expanding its footprint in the domestic as well as international markets though things suddenly changed with COVID-19. While lockdown is being relieved and a few markets are opening, we intend to gain momentum in due course. This year will be more to consolidate and to regain momentum before we re-align our expansion plans.
What has been the revenue for FY20 and what is expected in FY21?
We closed FY20 with almost ₹1,300 crore against ₹1,250 crore for FY19 when all of a sudden COVID-19 struck, halting the entire world. We are confident that the businesses will regain momentum in the next 2-3 months (of course depending on how early we are able to control/eradicate COVID-19) and we can probably expect a growth journey of 10–15%. About 60% of FY19’s turnover came from footwear and the remaining from apparel and accessories.
How long do you expect it will it take for the market to rebound?
It is difficult to clearly state this. As sentiments become more positive, we are all expecting it to regain momentum soon. As you already know, online sales have begun and certain retail outlets too have started operations, so hopefully soon we should start seeing a good response amid the new normal era.