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Go Fashion India Limited (GFL), a women’s undergarment company, has said that despite the drop in raw material prices, it will not reduce selling prices, said CEO Gautam Saraogi.
“Even if the price of the raw material goes down, we will not lower our selling price because if we even think about doing that, it will have a very negative impact in front of our main customers,” he said on the earnings call.
He also said that Go Fashion leggings and churidars are priced around Rs 599. About 80% of the company’s product portfolio is priced below 1,000 rubles. Mr. Saraogi said that the price increase was based on the increase in the price of raw materials in the last 18 months.
In FY22, GFIL made two rate hikes. The first such was, over the years, a response to rising commodity prices. “But now, the price fluctuation in relation to the raw material that we have seen in the last 3-4 months is stable,” he said.
Expressing optimism about growth prospects, the overall underwear market is expected to grow at a rate of 12.4% annually with an opportunity of 24,000 crores by 2025. The organized underwear market is expected to grow three times to Rs 9,000 crore.
“We have chosen to focus only on the underwear segment. We will not divert our resources from investing in other apparel,” he said in the annual report.
Ensuring that GFIL only caters to a certain segment of this market [the upper to mid-market customer], said that this segment has the largest share in the market. It was growing following the growing lifestyle and price setting.
In the current fiscal, GFL plans to open 120-130 exclusive brand outlets (EBOs), with an investment of Rs 35 lakh each and a payback period of 15-18 months.
As on date, GFIL has 513 EBOs and 1,473 large format stores in 31 states and UTs. It also generates sales through multi-brand outlets and online.
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