GOCOLORS - Go Fashion (India) Limited Share Price

Question: "Firstly, on the store closures. Now last quarter, the guidance was that this year will be very low in terms of store closures, probably 4 to 5 maximum. This quarter itself has witnessed 4 store closures. So I understand you've reiterated the store guidance, but any color on overall gross additions? And I mean, is there a risk that this year also will be underwhelming in terms of store additions given the environment we have started the year with?"

Answer: "Thank you, Sameer. Out of the 4 closures, one was at an airport for renovations, and another was due to a mall shutdown. The other closures were standard for business. We believe we can add the targeted 120-130 stores this fiscal year, as our business development team is optimistic about upcoming store openings."

Question: "There's a decline of 13% in the LFS channel despite healthy outlet additions. Any color on this decline? And how should we look at this channel going forward?"

Answer: "April and May saw low footfalls due to Eid falling in March and geopolitical issues affecting sales. However, we anticipate a recovery as demand improved in June. We're optimistic about stabilizing LFS performance in the upcoming quarters, seeing this decline as a one-time event."

Question: "So in this quarter, employee cost has seen a sharp increase by 19%. What would be the reason behind that?"

Answer: "The increase is primarily due to adding employees for newly opened stores and annual increments that take effect in April. Revenue being flat makes employee costs appear high as a percentage. Essentially, it's due to new hires and regular salary increases, compounded by stagnant revenue."

Question: "Can you dwell more on the Bangladesh issue? So are you still continuing to see delays because of imports?"

Answer: "Indeed, we faced delays because shipments that usually came by road were rerouted to sea transport, which took longer. Some sizes are now being produced locally to mitigate future delays. Impact on sales was minor, but it affected the availability of some top-selling SKUs in Q1."

Question: "What steps are we taking to improve same-store sales growth (SSSG)?"

Answer: "We are focusing on product innovation and refining our assortment without drastic changes. Sustaining a strong portfolio, particularly in pants and trousers, is key. We're set for new product launches in Q2 and Q3, which we believe will positively impact SSSG."

Question: "Could you clarify the uptick in gross margins and how should we view them moving forward?"

Answer: "Gross margins will likely maintain around 62% to 63%. We achieved 63% this quarter due to an improved product mix and easing raw material costs. We aim to sustain these margins as we manage costs effectively while expanding our product offerings."

Question: "Any insights into the status of our market share and competition?"

Answer: "While we await updated data from our market study, we don't believe we've lost market share. The competitive landscape includes new entries impacting the broader ecosystem rather than direct competition specifically affecting us."

Question: "With the rollout of new categories, is there a strategy in place?"

Answer: "We're trialing our new categories with pilot stores, focusing on extending existing store spaces. This will allow us to test demand before committing to broader rollouts or exploring acquisitions."

Question: "Can we quantify the impact of the geographic expansion into new markets?"

Answer: "We aim for 60-70% of new store openings in Tier 2 and Tier 3 markets. This strategy is to capitalize on less saturated areas and build our brand presence where demand is increasing."

Question: "How are footfall declines in previous months impacting overall performance?"

Answer: "April and May saw weaker footfalls due to external factors like Eid scheduling and market sentiment. While it affected us, we expect recovery as indicated by improving retail metrics in June and ongoing efforts towards reviving SSSG."