Go Fashion India Ltd. (GFIL), a women’s apparel firm, will not reduce its selling prices even if there is a fall in raw material prices, CEO Gautam Saraogi said.
“Even if the price of the raw material goes down, we will not lower the selling price because if we think about doing that, it will create a very negative impact in front of our end customers,” he said during an earnings call.
He also said that Go Fashion leggings and churidars cost around ₹599. About 80% of the company’s product portfolio is priced below ₹1,000. Mr. Saraogi said that a price increase was made based on the increase in the cost of raw material over the past 18 months.
During FY22, GFIL had two price increases. The first such, in years, was in response to an increase in the sourcing cost of goods sold. “But, for the moment, price fluctuations are stable in terms of raw material from what we have seen in the last 3-4 months,” he said.
Expressing optimism about the growth prospects, he said the total underwear market was expected to grow at 12.4% annually to emerge as a Rs 24,000 crore opportunity by 2025. The organized underwear market was expected to grow thrice at ₹9,000.
“We have chosen to focus exclusively on the underwear segment. We will not dilute our focus by allocating our investible resources in seeding other apparel segments,” he said in the annual report.
Asserting that GFIL would only address a specific segment of this market [the upper to mid-market customer], he said that this segment occupies the largest share of the market. It was growing by following the evolving lifestyle patterns and pricing positioning.
During the current fiscal, GFIL plans to open 120-130 exclusive brand stores (EBOs) at an investment of Rs 35 lakh each with a payback time of 15-18 months.
As of now, GFIL has 513 EBOs and 1,473 large format stores across 31 states and UTs. It also generates sales through multi-brand outlets and online.
