Go Fashion shuts 66 stores in Q1, bets on bigger formats
Go Fashion closed four stores for every one it opened last quarter. Same store sales turned positive for the first time in several quarters.
- 66 stores closed, 15 opened, network down to 751 outlets
- Revenue flat at Rs 223 crore, profit down 26 percent to Rs 16 crore
- Same store sales growth positive at 0.6 percent
- Shift to 700 sq ft formats to carry a wider assortment
Go Fashion, which runs the Go Colors women’s bottomwear chain, ended Q1 FY27 with 751 exclusive brand outlets after closing 66 stores and opening 15. Revenue was flat at Rs 223 crore, EBITDA before exceptional items slipped 2 percent to Rs 67 crore with margin at 30.3 percent, and profit after tax fell 26 percent to Rs 16 crore.
The closures are deliberate. Average store size is now 569 square feet and the company is steering the fleet towards outlets of 700 square feet and above, which grew 2.5 to 3 percent in the quarter. Total retail area stands at 426,963 square feet. Same store sales growth came in at 0.6 percent, the first positive print in several quarters, with same cluster growth at 1.2 percent.
Channel performance was uneven. Exclusive outlets contributed Rs 161 crore, up 2 percent. Large format stores contributed Rs 50 crore, also up 2 percent, and online Rs 8 crore, up 4 percent. The multi brand outlet and other channel fell 54 percent to Rs 4 crore. Value added products now account for about 70 percent of revenue against traditional leggings and churidars.
The operator lesson is density over count. A 400 square foot store cannot carry the wider assortment that lifts basket size, so adding more of them stops working once the range broadens. Go Fashion is trading store count for shelf space and absorbing restructuring costs in the process. Cash stands at Rs 202 crore and working capital at 139 days, which is what funds a rebuild of this kind.
Zane’s analysis draws on original reporting by Investing.com. Read the original report.