Brands like Burberry and Armani as well as online retail help Asia’s second richest man bag record retail profit
- The operating profit for Reliance Retail jumped 13.3% thanks to the revival in the fashion and lifestyle segment.
- In the quarter ending December 2020, the fashion and lifestyle grew by 1.5 times over the last quarter.
- Reliance Retail added 327 stores in the last quarter alone, taking the total to 12,201 stores in the country.
AdvertisementReliance Retail managed to clock record profit despite a 18.6% fall in revenue compared to the same time last year. The operating profit for India’s largest retailer— owned by Asia’s second richest man— jumped 13.3%, to a new record high, thanks to the revival in the fashion and lifestyle segment.
This may be yet another signal for economic recovery in India, just like the spike in goods and services tax collection, e-way bills, and railway freight movement in the month of December.
This particular segment, which includes Reliance’s partnership with brands like Burberry, Armani, Diesel, Marks and Spencer, as well as online platforms like Ajio.com, contributes only 8% to Reliance Retail’s total revenue, but brings in a big profit margin.
In the quarter ending December 2020, the segment grew by 1.5 times over the last quarter.
|Segment||Brands||Margin (Source: BOB Capital Markets)|
|Food and Grocery||Reliance Fresh, Reliance Smart and Reliance Market||6.5%|
|Consumer electronics||Reliance Digital Jio stores||6.2%2.2%|
|Fashion and lifestyle||Reliance Trends, Project Eve, Reliance Footwear, Reliance Jewels and AJIO.com.||24%|
“This was led by near doubling of Fashion and Lifestyle earnings, continued benefits from cost management initiatives and a boost from higher investment income of ₹775 crore,” Reliance Industries, the parent company for Reliance Retail, said in its statement. This was the quarter when Reliance closed all the fund raising for its retail unit.
Reliance added 327 stores in the last quarter alone, taking the total to 12,201 stores in the country, compared to 11,300 at the end of 2019. Retail contributes to about a quarter of RIL’s total revenue and about a third of its operating profit.
Ambani, whose net worth is at $79 billion, seems to be continuing his push forward with his new commerce venture, JioMart. The earnings report said that “new commerce was up 12 times year-on-year” and that the retail segment has already partnered with “a million merchants”.
While media reports said that JioMart and WhatsApp will be integrated, the company’s statement was silent on it.
Reliance Jio’s profit grows 15% but new subscribers are the lowest in 7 quarters
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