Future Lifestyle Fashions Limited (“Future Lifestyle” or the “Company”) owns and markets over two dozen fashion brands through exclusive brand outlets, department stores and multi brand outlets, as well as company operated chains such as Central, Brand Factory and Planet Sports. It collectively operates around 400 stores spread over 5 million square feet of retail space.

The Company has a portfolio of fashion brands that covers the entire gamut of fashion categories including formal menswear, casual wear, active or sportswear, ethnic wear, denim wear, footwear and accessories for men and women.

Future Lifestyle also operates its own retail chains – Central and Brand Factory.

Future Lifestyle Brand Profile

Future-Lifestyle-Fashions-Brands

  • The Company’s own brand comprise 40% of total Future Lifestyle revenue
  • Own channel comprising 70% of own brands

Note – 10.95% OF PROMOTER HOLDING IS PLEDGED.

Future Lifestyle Fashions Financials

Particulars FY14 FY15 FY16 FY17 FY18
Revenue (In Rs. Cr.) 2,743.98 3,134.09 3,300.19 3,878.91 4,498.22
Growth 14.22% 5.30% 17.54% 15.97%
EBITDA (In Rs. Cr.) 256.34 330.16 298.99 357.17 408.73
EBITDA Margin 9.34% 10.53% 9.06% 9.21% 9.09%
PAT (In Rs. Cr.) 23.28 18.55 29.47 45.00 126.08
PAT Margin 0.85% 0.59% 0.89% 1.16% 2.80%
EPS (In Rs.) 1.51 1.05 1.55 2.37 6.61
Historic P/E (Closing Price of 31st March) 39.50 64.52 51.29 117.32 60.77
CURRENT P/E (based on price of 20th August – Rs. 439 and EPS – Rs.6.61) 67.60  
Shareholder funds (In Rs. Cr.) 1,291.32 1,569.72 1,623.24 1,383.04 1,529.61
Minority Interest (In Rs. Cr.) 0.00 0.00 0.00 0.00 0.01
Debt (In Rs. Cr.) 1,341.92 1,149.40 915.54 481.84 709.50
Cash (In Rs. Cr.) 271.08 59.66 14.62 29.92 32.96
RATIOS
D/E 1.04 0.73 0.56 0.35 0.46
Interest Coverage 1.57 2.09 2.21 2.90 3.96
ROCE 9.73% 12.14% 11.78% 19.15% 18.25%
ROE 1.80% 1.18% 1.82% 3.25% 8.24%

*For FY 2014, 2015 and 2016, numbers are on standalone basis.

WHAT’S DRIVING THE STOCK?

Strong Management

Mr. Kishore Biyani – Group CEO

  • Mr. Kishore Biyani is the Founder and Group CEO of Future Group
  • In 2001, he led the foundation of Big Bazaar. Since then a number of retail chains have become part of Future Group
  • He has also led Future Group in investing and mentoring a number of supply partners and entrepreneurs as well as joint ventures with British footwear market, Clarks and Europe’s leading insurer, Generali Group.

Mr. Rakesh Biyani – Non Executive Director

  • He has been associated with the company for over 20 years and leads the management and expansion of the company’s flagship formats, Central, Big Bazaar and Food Bazaar.

Rational Expansion Of Retail Channels

Future Lifestyle, through its retail channels – Central, Brand Factory and other EBOs (Planet Sports, aLL, etc) – has a strong network of 332 stores, covering >5.7mn sq ft extending to ~90 cities, and making it one of the largest networks in India. A diversified and integrated model (an array of brands available through its retail chain) supports the Company’s store expansion programme ‐ it can play with its brand portfolio depending on the type of brand and the areas where stores need to be opened.

Channel March 2018 – No. of Stores
Central 40
Brand Factory 63
EBOS 229
Total 332
Area (mn sqft) 5.7

Strong Brand Portfolio

Future Lifestyle has emerged as a leading branded fashion player with a portfolio of over 30 brands, of which 18 are either owned or licensed.

Future Lifestyle’s power brand portfolio includes brands such as Lee Cooper, John Miller, Indigo Nation, Scullers, Jealous 21 and aLL. These power brands contribute 60% to the revenue.

Future Lifestyle is well placed to benefit from increasing brand awareness amongst consumers on the back of established pan India presence of various operationally profitable formats (Central, Brand Factory and EBOs), established private brands and Company’s various investments in independent fashion brands.

L Catterton Asia to Make a Significant Investment of Approximately 10% Stake

On 21st May, 2018, L Catterton Asia, the Asian unit of the largest and most global consumer‐focused private equity firm in the world, announced a significant investment in the Company. This investment as per the management will enable Future Lifestyle’s retail formats, Central and Brand Factory, and own brands to leverage the global fashion and retail expertise of L Catterton to further strengthen and expand the business.

WHAT’S DRAGGING THE STOCK?

Intense Competition

Many foreign brands are increasing presence in India to cash in on the humongous growth opportunity. Many foreign brands such as Zara, Tommy Hilfiger, H&M, Aldo, GAP etc have already established themselves. Entry of these foreign brands, more sale period and offers will keep the competitive intensity high.

Threat From E-Commerce

Aggressive discounts and sale period by e-commerce companies has led to shift in consumer buying habits from offline to online.