Benetton India expects up to 45% slump in revenue this year due to COVID-19; 'year behind in brand journey,' says MD
Benetton, which has restarted opening its stores in India, expects online sales to gain traction by around 10-15 percent in the post-COVID-19 era, but believes that offline sales will remain dominant.
New Delhi: The coronavirus pandemic is expected to hit the revenue of fashion retailer Benetton India by up to 45 percent in 2020, and its brand journey in the country has gone back by a year due to the health crisis, a top company official said.
The company, which has restarted opening its stores in India, expects online sales to gain traction by around 10-15 percent in the post- COVID-19 era, but believes that offline sales will remain dominant.
"From the point of impact, yes it is a big one and from our business perspective we feel that we are a year behind now in our brand journey," Benetton India Managing Director and CEO Sundeep Chugh told PTI.
Elaborating further, he said,"What we are supposed to deliver in this year's budget (January-December), if everything goes well and there is no COVID-19 phase II, we anticipate that it can only be delivered next year. To sum it up, almost a year behind in our brand journey in India."
In terms of revenue impact, he said various top consultants have projected 35-45 percent decline in revenue and Benetton India also "expects a similar 35-45 percent impact".
Commenting on the company's store reopening, he said out of the 350 stores that Benetton India has across the country, till last week it has opened about 15 stores which are located in Goa, North East, Bengaluru and at a couple of other places where the company has received permission from local authorities.
When asked if the lockdown could have an impact on employment and lead to retrenchments in the company, Chugh replied in the negative.
"Our first priority was protecting and investing in our people. Our brand is all about team, which is behind the brand...We realise that we are in a very difficult situation...(but) we keep investing in our people. Whatever brand we are today, we are all because of our team," he said.
He further said,"Even if we lost two months of turnover, the team when they are back, with an incremental contribution everyday over the next 12-15 months, when they look back this (difficulties) should be a thing of the past..."
During the period of lockdown, Chugh said Benetton India has been focussing on "upskilling them across the value chain" and charting training road map covering all key functions, while also getting people acquainted with new technology such as using digital technology for meetings with regional offices.
Stating that COVID-19 is also setting a new phenomena wherein people are going to adopt newer ways of communication and presentation, he said "this will also help people settle when the 'new normal' is back."
When asked about the changes expected in consumer behaviour and how the company is looking towards the "new normal", Chugh said definitely there is a new buying pattern emerging after COVID-19 .
"But I feel that change in behaviour will not be very significant," he said adding in China which is now settling down, there is a 10-15 percent better throughput in online as compared to offline, similar to what Hong Kong witnessed during SARS.
"So the better traction or throughput of online will continue for 4-6 months and certain people would also try to adapt to that habit...it would see an initial advantage for the next four to six months. There would be a balance tilting towards online," he said.
Yet, Chugh said, in a country which is so big, diverse and dynamic, offline is going to remain dominant.
"Yes, online would emerge but eventually over a period of time because of the multi-channel environment which prevails across the country , all the channels will have to be given due respect and all the channels will fare very good."
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