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REPORT ANALYSIS OF
CANTABIL
Submitted to: Submitted by:
Mr. Vasant Kothari Shubhda
MFT 2nd sem
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INDUSTRY OVERVIEW INDIAN RETAIL SECTOR ² A N
O VERVIEW
Retail is a
flourishing
industry in indiaThe country
provides the
second best global
opportunity forretail development.
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INDIAN RETAIL SECTOR ² A N
O VERVIEW
In the last five
years, India has
become a hot
destination for theentry of global
consumer brands
and international
business entities.
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INDIAN RETAIL SECTOR ² A N
O VERVIEW
Consumer is getting more conscious and is
demanding more value for money
It has become important for retailers to
understand the consumers and position
one·s retail stores accordingly
The Indian retail market has been ranked
the most attractive emerging market forinvestment followed by Russia and China
in the retail sector
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GLOBAL RET AIL DEVELOPMENT INDEX
(GRDI), IN 2009
It indicates that India is still one of the most
preferred destinations for retail among internationalinvestors.
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INDIAN RETAIL SECTOR ² A N
O VERVIEW
The Indian Retail market is estimated at
about USD 410 billion
It constitutes
y 60% of private consumption
y and about 35% of India·s GDP
With Indian GDP expected to grow at 7-
8% in the next coming years, the retailmarket is expected to touch USD 860
billion by 2018.
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�The organized retail in India is poised to grow at an
astronomical pace over next few years�Expected to grow from 5% to about 25% of the total retail
market by 2018
�Revenues from organized retail is expected to touch
US$220 billion in 2018.
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INDIAN RETAIL SECTOR ² A N
O VERVIEW
Share of Verticals
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INDIAN TEXTILE INDUSTRY
Textile industry:
one of the most
important
industries in theIndian economy
Both in terms of
employment
generation and
contribution to
GDP.
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INDIAN TEXTILE INDUSTRY
y It provides employment to about 91
million people (both directly and
indirectly) in textile and allied activities
y This sector also contributes
A bout 4 % in country·s gross domestic
production (GDP)
14 % of industrial production
A nd over 13 % of the country's total export
earnings.
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INDIAN A PPAREL M ARKET
The domestic apparel retailing industry is
estimated to be round US$ 2.7 billion
y In spite of recession its growing at 5-7 % in
2009-10.
The domestic organized garment retailing
attained a growth of 13-14 % for year
ended march 2009.
Clothing & accessories segment
dominates the organized retail sector
y It contributes over 38 per cent of the
organized retail pie.
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INDIAN A PPAREL M ARKET
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A PPAREL SEGMENTS AT A
GLANCE
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A PPAREL SEGMENTS AT A
GLANCE
Menswear: largest product category both
in terms of volume and value
Women's-wear: comprises 31.7% share of
the Indian apparel market in value terms
Unisex Apparel: It grew by 5.6% in
volume and 7.1% in value in 2008 over the
previous year.
Kids wear and Uniforms: has shown a
growth of 18.6% in 2008 over 2007.
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CANTABIL: EMPLOYEE
HIERARCHY
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CANTABIL: BUSINESS
O VERVIEW
Provides business
of
y Designing
y Manufacturing
y Branding
y A nd retailing of
apparels
Brand names:
´cantabilµ and ´la
fansoµ.
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CANTABIL: BUSINESS
O VERVIEW
Network of 381 exclusive retail outlets (as
of august 31, 2009) spread across india.
The ´cantabilµ brand with 206 exclusive
retail outlets offers
y The complete range of formalwear, party-
wear, casuals & ultracasual clothing for
men, women and kids
y In the middle to high income group.
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CANTABIL: BUSINESS
O VERVIEW
Presently they have
3 in-house
manufacturing /
finishing units and 4warehouses located
in delhi.
A lso have 3 third
party dedicatedunits manufacturing
exclusively for them.
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CANTABIL: BUSINESS
O VERVIEW
They have fabricatingarrangements with 94manufacturing unitsfor outsourcing
cutting and stitching. Proposing to set up a
large integratedmanufacturing facilityat Bahadurgarh: to
reduce dependence onthird party
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E XISTING M ANUFACTURING
F ACILITIES
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THE DET AILS OF OUR PRODUCTS A ND THEIR
S ALES IN FY 2007-08 A ND FY 2008-09 A RE
GI VEN BELOW:
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CANTABIL: REGION WISE
BRE AK UP OF EXCLUSI VE
RET AIL OUTLETS
(as on August 31, 2009)
The floor area on which our brands Cantabil and
La FA NSO are sold is 194990 sq ft and 98010 sq
ft respectively.
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two models to operate outlets
y either company owned & franchisee
managed
y or franchisee owned & operated.
The break up of the number of exclusive
retail outlets under various models as on
A ugust 31, 2009
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CANTABIL: COMPETITORS
There are about 25 major players operating
branded apparel segments in India. The following
is the details of major players and their major
brands in the apparel retail industry.
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CANTABIL: INTERN AL
RISK FACTORS
Party to certain legal proceedings, if
decided against, could have an adverse
effect
dependent on third parties for significantportion of sales and for management of
retail outlets.
y If these third parties do not continue to
assist in retail store management and sales,
revenue could be adversely affected
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CANTABIL: INTERN AL
RISK FACTORS
Raw materials including fabric, is sourced
from external suppliers.
y Therefore, fluctuation in the price,
availability and quality of fabric could causedelay and increased cost
Dependent on third parties for
manufacturing of major portion of
products Inability to manage growth can adversely
affect business and financial performance.
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CANTABIL: INTERN AL
RISK FACTORS
Inability to maintain or improve brand
image can badly affect business and
financial performance
Inability to identify evolving fashiontrends and create new designs may
adversely affect our business
Inability to compete with competitors
could adversely impact business and
financial operations
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CANTABIL: INTERN AL
RISK FACTORS
Majority of retail outlets are not on
ownership basis but taken on contractual
agreement basis.
y The non renewal of lease or any deficiency inthe title/ ownership rights/ development
rights of the owners may impede the
operation of outlets.
Business is dependent on manufacturingfacilities which are located geographically
in one area.
y Shutdown of operations may have an
adverse effect
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CANTABIL: INTERN AL
RISK FACTORS
Business is seasonal in nature and sales
are realized during second half of the
financial year.
y A ny substantial decrease in sales during thisperiod can have a material adverse affect on
our financial performance
Growth strategy is to expand into new
geographic areas that, leads to certainrisks
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CANTABIL: INTERN AL
RISK FACTORS
To find locations to open and operate
exclusive brand outlets.
Success depends upon our ability to retain
the key management and other personnel
The brand building exercise could be
affected if application for registration of
certain intellectual property rights are not
approved
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CANTABIL: INTERN AL
RISK FACTORS
Solely dependant on third parties for the
supply and transportation of apparel from
warehouses, which are subject to various
uncertainties and risksWe face the risk of potential liabilities
from lawsuits or claims by customers
We may be subject to restrictive covenants
under term loans and working capital
facilities provided to us by our lender(s).
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CANTABIL: INTERN AL
RISK FACTORS
Failure to obtain certain approvals or
licenses in a timely manner or at all may
adversely affect our operations
Insurance coverage may not adequatelyprotect us against certain operating
hazards and this may have an adverse
affect on our business operations
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CANTABIL: EXTERN AL
RISK FACTORS
A ny changes in the regulatory framework
could adversely affect operations and
growth prospects
Civil disturbances, extremities of weather,regional conflicts and other political
instability may have adverse affects
We depend on banks and financial
institutions and other sources for meeting
our short and medium term financial
requirements.
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CANTABIL: EXTERN AL
RISK FACTORS
Regional or international hostilities,
terrorist attack or other acts of violence of
war could have a adverse impact on
international or indian financial marketsSuch incidents could also create a greater
perception about the investment in
y This could have an adverse impact on
business and on the market price of company·s equity shares.
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CANTABIL: EXTERN AL
RISK FACTORS
A n economic downturn may negatively
impact company·s operating results.
Investors will not receive the Equity
shares purchased in this issue untilseveral days after they have paid for
them, which will subject them to market
risk.
A n active market for the Equity shares
may not develop which may cause the
price of the equity shares to fall and may
limit investor·s ability to sell the Equity
Shares.
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CANTABIL: EXTERN AL
RISK FACTORS
The market value of the Equity Shares
may fluctuate due to the volatility of the
securities markets.
Shareholders will bear the risk of fluctuation in the price of Equity Shares.
Future issues or sales of equity Shares of
our company may significantly affect the
trading price of the Equity Shares.
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CANTABIL: STRENGTHS
Value Proposition and Understanding the
Consumers
Strong In-House Design & Research team
Personal Relationship at the Outlet Floor
A pparel range catering to wide customer
base
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CANTABIL: STRENGTHS
Exclusive Brand Outlets
In-house integrated Capacity
Strong Management Team with Industry
Specific Experience
Strong IT Infrastructure
Commitment to quality
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CANTABIL: GROWTH
STR A TEGIES
To enhance presence across pan India
Strengthening the brands
To maintain Focus on Long-term
Relationships
Enhancing manufacturing capacities
Continue to invest in human resources
and IT infrastructure
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CANTABIL: STORE LOCA TION
To enhance visibility and to ensure maximum
footfalls, our stores are situated at malls and at
prominent locations
Stores are situated in major metros, mini metros,large cities and other Tier II cities
Such metros and cities includes Delhi, Mumbai,
K olkatta, Bangalore, Hyderabad, Pune, Jaipur,
A hemdabad, Vadodra, Lucknow, K anpur, Patna,
Ranchi, Dehradun, Meerut, Ludhiana,Jalandhar, Udaipur, A gra, Ghaziabad and
Gurgaon etc.
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REFERENCES
A nnual report of Cantabil, 2009-10