Brand Concepts Ltd (NSE: BCONCEPTS) Q2 2025 Earnings Call dated Nov. 22, 2024
Corporate Participants:
Abhinav Kumar — Whole Time Director & CEO
Vinay Pandit — Investor Relations
Analysts:
Abhi Jain — Analyst
Jinesh Joshi — Analyst
Ishpreet — Analyst
Naysar Parikh — Analyst
Nilesh Jain — Analyst
Sunandha Joshi — Analyst
Shrinjana Mittal — Analyst
Sharad Anuragi — Analyst
Presentation:
Operator
Ladies and gentlemen, I welcome you all to the Q2 and H1 FY ’25 Post Earnings Conference Call of Brand Concepts Limited. Today on the call from the management team, we have with us Mr. Abhinav Kumar, Whole-Time Director and CEO. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being recorded.
I would now request the management to detail us about the business and performance highlights for the quarter that went by, the current business and industry scenario, the growth plans and vision for the coming year, post which we will open the floor for Q&A.
Over to you, Abhinav.
Abhinav Kumar — Whole Time Director & CEO
Hi. Very, very good afternoon to everyone. Thanks a ton for joining the call. Just a quick highlight. So Q2, in terms of the revenue, I think the growth has been a little flattish. However, looking at the current market conditions, I think we’ve still fared well in terms of retaining our position, but we’ve seen a significant improve in our overall margins. There is an improvement. It is basically on the count where — while the entire market is on very deep discounting for reasons I think known to all of you, the overall market is at a very, very deep discounting. However, we have taken a call of not going that route and not heavily discounting. And hence, on that count, we’ve seen a little better retention of our margins. So in fact, our margins have improved.
We are still not — the new pricing and everything which I had spoken about earlier has still not come into a complete effect and hence, you can attribute this improved margins on the basis of lower discount. So once — by the spring/summer season, once the new products start hitting the market, I think we’ll have a better intake in terms of our gross margins further. So yeah, that’s there. Rest all the projects, the new hard luggage project is currently on track. The machinery and everything has already been ordered. As we speak, our team is in China taking a trial of the machinery. So we expect that by January end, the machinery should be here. And as committed earlier that by Feb and March, we should start our trial run. So our trial runs are on track.
So next year is when we will start seeing some results coming out from the new plant from the new factory, our own manufacturing. The merger of IFF Overseas also is on track. It is in NCLT currently. So we hope that within the next month or two, we should be getting that approval as well. So either in December or say beginning of January hopefully that approval should also come through. So that unit will also get integrated. So yes.
So that’s basically from my side. We always have more questions and then we start running short of time. So I’ll open the house for the question and answer.
Questions and Answers:
Operator
Sure. Thanks, Abhinav. All those who wish to ask a question, please raise hand. In case you’re unable to do so, just drop a message on the chat box and we’ll invite you to ask a question. We’ll take the first question from Abhi Jain. Abhi, you can go ahead, please.
Abhi Jain
Good afternoon. Am I audible?
Abhinav Kumar
Yes. Hi, Abhi.
Abhi Jain
Hi, Mr. Kumar, how are you?
Abhinav Kumar
Good.
Abhi Jain
So Mr. Kumar, just one is a very hygiene question. Typically companies have these investor calls on the day of the result or the next day. Any reason why we were — we are having this almost two weeks after the results?
Abhinav Kumar
Yeah. I was actually traveling. I was not in the country. So we did our Board meeting. The day we did our Board meeting and the results and that night itself I had to travel out of the country. And hence, I had to — hence, we postponed this call. So I just came back yesterday.
Abhi Jain
Okay. Second question, I mean, although short-term trends and short-term variation doesn’t matter much. But given the volatility that we are seeing in the market and obviously, clearly, the flattish revenue growth came as a surprise. I just want to limit myself to the very short term because I think forecasting or trying to understand what will happen six, nine months down the line in this macroeconomic environment is not very helpful. So given that we are already almost 50 days into the Q3, are you seeing that revenue growth will come back in Q3?
Second line of question on the same thing was that, now — it was Q3 of last year, when there were certain onetime expenses that started coming in licensing costs, obviously, certain contracts were renewed because of this license, the cost increased. And hence, there was a pressure on PAT margins. So given now that we have had four quarters of subdued PAT margin as compared to what our normal trend line is, just from a Q3 perspective, are you seeing revenue growth coming back? And are you seeing PAT margin improving going forward? Because as I understand, it is very difficult for anyone to now forecast what will happen six months down or nine months down the line given the uncertain environment that we are in.
Abhinav Kumar
Yeah. So see, yes, you’re absolutely right when you say that these are uncertain environments. And I think everybody is sailing in the same boat. So to answer first, the short term, this thing Q3, are we seeing any upshoot, so there are a few green shoots here and there, which we are seeing, but not too much. In fact, the overall scenario remains similar, nothing much has changed. So hence, I doubt if overall entirely in terms of retail, if I talk about, there’s not much growth sort of happening all across, right? So the demand still seems to be a little tepid and all of that. And coupled with our industry particularly and when it comes to Travel Gear specifically, if I see a bigger concern is the heavy discounting, which is being followed by the industry leaders.
So that’s a serious dent because at the end of the day, I was just having a discussion with somebody and I was telling him that while — if the jump for a consumer in a particular price point is, say, 30%, 40%, even to the extent of 50%, the consumer would be willing to shift for a brand ahead or willing to pay that extra price. But if that jump becomes 200%, 300%, it becomes very difficult for the overall industry scenario, right? If I talk about any industry in the past five years, if I would talk about, every industry has a price escalation, right, whether it is apparel, whether it is — so if you were buying a particular brand T-shirt five years back and you buy the same brand T-shirt today, you will see that the prices would have moved up a little bit. If not very high, at least sort of that inflationary pressure or whatever, [Foreign Speech].
Ours is an industry which in the past five years I think we’ve just gone down in terms of the pricing, which is not — I wouldn’t say that it’s a very good scenario for a branded play segment. But sadly, here more than a branded play, the players are operating more as a commodity player, right? But that’s good news for us. I see it as a good news that there are very, very few players who are actually playing the whole branded sort of a game. So it might be a few quarters here and there, you might face certain issues. But eventually, in the long run, I think sticking to once this thing always helps. And hence, we’ve taken a call that we’re not going that route where we start compromising our gross margins only to sort of capture some market share or increase revenue and actually not be very profitable.
So increase in our PAT margins will always come on two counts, right? One is overall revenue increase and the second is your gross margin intake. So while we are working very, very strongly on our gross margin intake by lowering discounts and everything. And by next season onwards, the pricing also will further change. We are the only players who have actually increased our pricing or reduced our discounting in this kind of a scenario. So you can imagine when I say that even if we are at a flattish growth, I consider it very good because you’re taking a reverse sort of a strategy as against whatever the market is doing today.
And even then if we are able to sort of give a flattish kind of this thing, I think it’s very good. So that’s how I would sort of sum it up. Yes, six months, nine months down the line, I think a lot of other factors will also start kicking in. Our own manufacturing will start kicking in. So margin intake from there will start kicking in. Hopefully, six, nine months, we would have strengthened a few more brands or probably a few of our — the new brands, they will be a little more strong two season — one season down the line. Again, addition of new brands is always a possibility. So probably that will also help us give us a little more might in our bite. So with all of that, yeah, I think six months to nine months horizon, if I take, I think we should start coming into a good position.
Abhi Jain
Just to sum it up, just last question because clearly this quarter has shown that the consumer is in a sort of a distress and it is across the board.
Abhinav Kumar
Yeah.
Abhi Jain
Consumers are downgrading. They are going to unorganized players because it’s very clearly understood that the large pie of this mass market consumer daily makes income surpluses because of which any pressure that they face in terms of their expenses, in terms of their income, they suddenly are not like the surplus to invest and that they start downgrading. Maybe that in mind, I think this scenario or this consumer would remain the same for the next few years. I understand that we are designing ourselves. We are positioning ourselves as bridge to luxury and the luxury brand house. Do you think that there is a sense in developing a brand which can cater to this very price-sensitive customer? Because at least in turbulent times, in times of macroeconomic distress, there is one brand or there is a couple of brand that is available, which can at least give us that stable — the stability or that core of our revenue growth or it can at least help us tie that tough times.
So because clearly, this quarter has shown that India, which was a story of consumer upgrading, consumer growth, that has really taken a hit. And I don’t see how will it get revived because clearly Diwali sales has not helped it revive, wedding season is not helping it revive. So there is some stress. And with RBI not cutting rates, etc, I doubt that next six to nine months would be very hard. So just wanted to understand that do you think that in this very price-sensitive market or the price-sensitive customer, any customer that we have, can we have brands which cater to our customers for our long-term stable growth?
Abhinav Kumar
Yeah. So see lowering price or playing that whole price game is a factor of a couple of things, Abhi. One is — so if I have to take names, in fact, rather I should not be taking names. But I’m saying if you look at…
Abhi Jain
For example, I think probably internet.
Abhinav Kumar
Yeah. So whether it is Safari or whether it is VIP, A, these are brands which the consumer knows or the brands have been in existence for more than two, three decades, right? So one, the brand is very well known, number one. Number two, they are backed up by a huge back-end manufacturing facility, right, their own, so which gives them that — and at a very, very high base. So Safari, for example, has a production capacity of 6.5 lakh pieces per month, right? VIP would be similar or more. So with that kind of a manufacturing muscle and everything and then you’re playing a price game vis-a-vis a player like us who is still very young, who is now setting up its first one line of plant, which will give us a production capacity of about 30,000 pieces a month, 25,000 to 30,000 pieces a month, yeah.
So considering all of this, we launch a new brand and try and play that whole price war. I don’t see that we have a complete arsenal today to be able to win this war. So I’ll stand corrected if you or anybody else feels that we should enter this price war. After we reach certain better scales, probably one and a half, two years down the line, if we are looking at doing something of launching a product, a brand product price proposition backed up by your own manufacturing, which holds some value to the end consumer, only then we’ll be able to play that whole sort of price game. But my guess is that at the current price levels, neither VIP nor Safari can sustain this. Today, they are sitting with huge inventory pile and hence, they are probably clearing off that inventory.
Abhi Jain
The letting is almost out of the market, I mean, there are pillars that promoters want to sell their stake. I think they’re clearly finding it difficult to survive. They don’t want to play this game I think.
Abhinav Kumar
Correct. Yeah. So today or tomorrow, I see that even these players will have to readjust their pricing because at the current prices, I don’t know how would anybody be able to make money there.
Abhi Jain
So my final…
Operator
Abhi, we’ll have to allow others to ask questions.
Abhi Jain
Thank you. Thank you.
Operator
Thank you. We’ll go to the next participant, Jinesh Joshi. Jinesh, please go ahead.
Jinesh Joshi
Yeah, am I audible?
Abhinav Kumar
Yes. Hi, Jinesh.
Jinesh Joshi
Hi, hi. Sir, one question on our growth, which was at about 2% in this quarter. I mean, you highlighted that we have chosen not to discount. But if I look at our channel mix, I believe we entered into CSD very recently. So obviously, support of CSD was there with us. And also some of our brands like UCB, etc, they are still in a very nascent stage and they ideally also should have contributed to the growth. And also the EBO count, I don’t have the exact number in front of me, but obviously that is also rising, which essentially means that we had certain channels which could have contributed to better growth. So in that environment, a 2% growth appears to be quite low.
And a related follow-up is that, sir, I mean, if we are holding on to the price and not discounting which ultimately I believe is a good strategy from a long-term standpoint. But if I look at the numbers of Samsonite India, I mean, this quarter, the top line was down by 25%, in the last two quarters too, the top line is down, which means that the demand in the premium or the economy segment is not that good enough. So in that context, I mean, how should we see growth for FY ’25 and ’26, especially the fact that demand in that particular segment is not holding off.
Abhinav Kumar
Yeah. So I think, Jinesh, you yourself have put this thing. I’m not saying that I’m collaborating with the figures or not collaborating with the figures. But if I go by your statement and I’m sure you would have researched it that Samsonite as a group has posted a 25% degrowth, right? And there are only two players, One is Samsonite, the group and second is us, which is into the branded sort of play and not a commoditized sort of a play, yeah. And so where a leader — a world leader with all their experience, with all their strength in the brands that they have been able to build over past too many decades, if they’ve sort of posted a 25% degrowth and I’m still posting sort of a flattish or a 2% higher revenue, I think we’ve done a good job from that perspective. But yes, you’re right that the demand is tepid.
We have had — we’ve added a few new channels, so CSD is a new channel, which has actually given us some extra growth. Our institutional last year, I had mentioned that we had done some program with Shoppers Stop, but with one of our partners, but that was not of a — it was never supposed to be of a cyclic nature. So that is a revenue drop this year in our institutional business. We are developing our overall institutional channel. That’s a separate strategy that we are taking where we are developing the whole overall institutional channel and focusing on that now. So in the years to come, we’ll have a good generating institutional business as well. But that one-off sale on a couple of seasons, we did that whole activity. And it served us well and it gave us a good amount of revenue as well.
So we’ve seen a drop, obviously, on that count, on that institutional channel sales. But that has been compensated with all the new activities that you said, the new brands that we have, the CSD that we’ve had. So with all of this, we’ve been able to sort of compensate. So the green lining is that our regular permanent channels are still holding fort, are still sort of growing even if it is in lower single-digits, but we’re still growing in most of our channels. That’s the silver lining that we have. So see, from a long-term perspective, I’m not worried. If I was worried, I would have expressed my worry in front of all of you. But from a long-term perspective, I am not worried. But yes, currently, the market scenarios are not very good. And I’m a little disappointed. I had really hoped that the Diwali and then the post marriage would sort of uplift the overall this thing. That sadly has not happened to the extent that I would have imagined.
Jinesh Joshi
Got that. Sir, second follow-up is obviously about the concerns that you recently cited on near-term growth challenges. By when do you expect the demand to really revive because our 30% or 25% growth CAGR journey, basically. I mean one quarter is fine if we are flattish, but if in the near term too you are seeing some kind of a growth challenge, then the base gets reset, right? So the question is when do you expect the demand to basically revive? I mean, will it take one quarter, two quarter? I know it’s difficult to predict, but at least some insight on that because from 30% if we come down directly to 2% and then if the near-term challenges are up, then it becomes slightly difficult to predict when will we be back with that double-digit kind of a growth number?
Abhinav Kumar
Yeah. More than anybody, I would want to get back to those double-digit kind of growth figures. But yes, see, it’s very difficult to predict what will happen in the next couple of quarters right now. So I’ll answer it from two aspects. One is the overall consumer aspect, right? So the consumer aspect is obviously not very good that all of us understand. And if the overall consumer sentiment is a little tepid, it is very difficult to predict when the consumer sentiment will sort of come back, number one. Number two is if you look at then in the overall consumer sentiment, you also look at your particular category sentiment. So for example, when it comes to small other goods, right, we are seeing an uptick, okay? Our strategies are working there. We’re seeing an uptick. Our sales numbers are increasing. We are increasing our footprint also.
When it comes to women handbags, I see that as a big opportunity area for us. Right now, the contribution of women handbag still in our overall business is extremely low, just about a 5% kind of a contribution. I easily see this going up and hence adding of brands like Juicy Couture in the women handbag category, which should give us that whole leeway to play in this particular category well. UCB handbags we’ve now launched. So that also whatever feedback that we’ve taken from the market, we’re getting good feedback from the market in that. So while these two categories are still showing some bit of a resilience, some bit of growth and I see opportunity areas over there.
When it comes to the Travel Gear, there one is the consumer that I said, which encompasses everyone. Then on the category side, this category [Foreign Speech], whether it is VIP or Safari now today, it’s public news that VIP is up for sale and somebody is trying to buy it. Now, who’s going to buy it, how this consolidation will happen? Today, the fact is that in Travel Gear, for example, distribution plays an important role, right? The dealers and distribution. It’s a — when VIP claims or Safari claims that they have 10,000, 12,000 point of sales, they don’t have 10,000 stores, right? Even if you take into account all the key format, large format stores that also would be in 100. Their own stores are in 200s.
So all of these distribution channels put together would be 1,000, not more than that, right? So where is the rest 10,000 coming from? It’s basically the dealer and distribution network, right? Now, to a dealer, when I’m billing a product, I’m billing him at a consumer price of INR25,000, my piece gets — as I set, I’m billing it to them at INR12,500 for one set. Today, the scenario is that VIP and Safari are billing to the distributors at INR4,000 a set. So whether this pricing is sustainable is a big question if you can’t be billing at that price. But today, they are doing it for whatever reasons.
So until and unless all of this also gets corrected, I don’t see this particular category upshooting from this scenario. And I don’t know, you should — I know most of the investors here, they also follow VIP, they also follow Safari. What is their sort of a guidance? Where is their sales is going to revive? When their gross margin is going to revive? Safari, yes, they have still posted a higher revenue. But even at that base and at a good — almost a 20% sort of a higher revenue, the profitability has halved, which means that gross margins have gone for a toss, right? So here, we’ll have to take both the scenarios into account.
Jinesh Joshi
Understood. Understood. Sir, just one last question from my side. This capacity expansion that you spoke of, of roughly about 30,000-odd pieces. I mean, what kind of gross margin expansion do you foresee because of this backward integration exercise?
Abhinav Kumar
Yeah. On the pieces, see, it all also depends on [Foreign Speech] probably it should increase our gross margin uptake by say a 1, 1.5 basis points, right? But if you look at all those 30,000 pieces, our margin should be up by at least a 15%.
Jinesh Joshi
Okay, sir. Thank you so much, and all the best. Hope the demand revives soon.
Abhinav Kumar
Thank you.
Operator
We’ll take the next question from Ishpreet. Ishpreet, you can go ahead.
Ishpreet
I wanted to understand on the sales part a little better. So when you say that you’ve taken a pricing growth, is it an absolute pricing growth that you’ve taken in Q2 also and further? Or is it the pricing mix that you’re targeting is very different in terms of premiumization amongst the existing brands?
Abhinav Kumar
So premiumization has still not kicked in to that extent, Ishpreet. So premiumization is going to kick in from probably next season onwards. So when I say that we have taken a pricing growth, it’s not that we’ve increased. In fact, a couple of models to be straight up, gone ahead and increased the pricing itself because the input costs had gone higher and everything. And hence, we went up and straightaway increased in a couple of models. In fact, the feedback that we got from a few dealers were actually sort of happy that there is at least some brand which is increasing pricing. Because how much of a volume growth can you get, right? But yes, to answer your question, our pricing has increased because of lower discounting or sort of flattish discounting. So we’ve not gone down the road of discounting too much. We’ve gone controlled in all our categories, not only in Travel Gear, but probably in all our categories where we’ve reduced on our consumer discounting.
Ishpreet
Right. Because last year, we wouldn’t be having UCB in our revenue, right, in Q2 because I think it started from Q3 onwards or was that in the base quarter also?
Abhinav Kumar
Q2, yes, there would be. Q2, we had started billing small other goods, so UCB was there in this thing, but probably it would not be very, very significant. Let me just check. So yeah. So last year Q2 or H1 rather if I see, yeah, H1 UCB was at 3% sort of a contribution, whereas this H1, it is about a 10% contribution.
Ishpreet
And this is largely Travel Gear and small leather goods?
Abhinav Kumar
Yes.
Ishpreet
Handbags have not yet started?
Abhinav Kumar
No, handbags very sparse. So we launched a very small capsule collection, so insignificant as of now.
Ishpreet
Okay. Great. Thank you and all the best.
Abhinav Kumar
Thanks, Ishpreet.
Operator
Thank you, Ishpreet. We’ll take the next question from the line of Naysar Parikh. Naysar, you can go ahead, please.
Naysar Parikh
Yeah, hi. Hi, Abhinav.
Abhinav Kumar
Hi, Naysar.
Naysar Parikh
A couple of questions. So first is can you share your same-store sales growth or equivalent metrics you track? And also what was the growth or decline in Tommy Hilfiger?
Abhinav Kumar
Sorry. Naysar, I missed you on the first part. Can you please repeat your question?
Naysar Parikh
Yeah, sorry. Same-store sales growth, SSSG or any relevant metric, similar metric you track and also Tommy Hilfiger, how much is the decline in TH?
Abhinav Kumar
So again, see, because we have multiple channels and multiple categories, so if I — for example, if I take away the institutional sales, right, which I said that it was one nature last year. If you take away those institutional sales and if I look at then the regular retail channels, we are at a growth in all those channels, which is the good part. So these are the metrics that we track. In terms of sales, same sales growth, again, I have some good news. So when it comes to our EBOs, for example, I had mentioned during my last call also that we were at a negative, right? It was a minus 10%, 12% kind of same sales growth. That would — by Q2, we’ve been able to bridge that gap to a very large extent. So by H1 this thing I think we would be very low-digit degrowth, low single-digit degrowth, minus 2%, minus 3%, minus 4% kinds, which I expect that we should be able to meet it out by December if everything goes well. I think we should be at a flat same sales in our EBOs at least and which I consider that it’s a very, very good achievement considering the current market scenario.
Naysar Parikh
Yeah, definitely.
Abhinav Kumar
Yeah. So large formats are still struggling a little bit. So the department stores, their bits and pieces, they are still struggling a bit. But again, we are far better in terms of the overall category. So if the category, for example, is at 5% degrowth, we would probably be at a 2% growth, that kind of a scenario. So that way we have sort of sorted. The biggest hit that we’ve got is one of our distribution business as I said. And where — it’s very difficult to track same sales growth because we don’t get that end retail point data. So we track the primary sort of a data. But yeah, so that’s the thing. So that’s somewhere where we’ve sort of gone down a little bit. But if I compare H1 to H1, modern trade also, we’ve grown overall. EBOs as I said is almost flattish. Distribution, very, very tepid growth. The major degrowth is on our institutional business. So that’s how the overall structure is today.
Naysar Parikh
Got it. And sorry, you mentioned what was that — what was the quantum or percent of the large insti [Phonetic] order last year?
Abhinav Kumar
Insti, so H1 itself, if you will see, we have done about INR25 odd crores, yeah. And whereas this year in H1, we’ve done close to INR12 crores, INR12.5 crores, it’s down by almost 50%.
Naysar Parikh
So that INR12 crores is the insti loss largely, okay.
Abhinav Kumar
INR12.5 crores is the insti loss.
Naysar Parikh
Okay. Understood. And Tommy Hilfiger, you mentioned obviously new brands have entered, right? So if we look at Tommy, how much would the decline be for H1?
Abhinav Kumar
Overall, including the insti, we are minus 3%. If I take off the insti, we would be at a sort of a 10%, 12% kind of a growth.
Naysar Parikh
Okay. Okay. So other brands have not really kicked in you mean then?
Abhinav Kumar
They have. As I said, UCB in terms of growth percentage would be crazy because we’ll be growing at a 300% kind of growth because the base itself was very small. But UCB, now you can say that it’s about 10% overall contribution.
Naysar Parikh
Okay. Understood.
Abhinav Kumar
Out of the INR140 crores that we’ve done in H1. So last year, H1 was about INR127 crores. Instead of INR127 crores, now we are at INR140 crores. So out of that INR140 crores, 10% is UCB now.
Naysar Parikh
Okay. Understood. Got it. And sir, how would the IFF performance have been? Obviously, merger will take some time, but how has IFF been doing and if you can throw some light on that?
Abhinav Kumar
To be really honest, not very good. We are seeing some demand decline there as well. It’s in the same industry, same this thing. So orders have sort of all our clients. And mind you, IFF was not dependent on Brand Concepts sale. So Brand Concepts used to contribute till last year. The contribution was less than 25%. I think 15% — around 15% to 20% sales was the Brand Concepts, rest all the sales was to different clients and Samsonite being one of our largest clients over there. So we’ve seen some demand slowdown there as well. But thankfully, we’ve been able to do a lot of course correction also over there. So net-net, we are still in a good position. I hope that the team over there has also worked hard and added a few new clients. So basis on that, things have sort of started reviving. But yes, the overall scenario is — we all sail in the same boat. So overall scenario, I wouldn’t say that it’s very, very robust over there.
Naysar Parikh
Okay. Understood. And sir, last question, just in terms of a new brand acquisition and things like that, anything over there, which is in advanced discussion or something?
Abhinav Kumar
Yeah. So yeah, so quite exciting news over there. We are in discussion with a couple of brands. In fact, as we grow old, as we become better, we are also fine tuning our brand selection. So we’re being very, very cautious in the brands that we’re speaking to. And so I can safely say that all the brands that now we are speaking to they are all big brands. None of the brands are — no single brand that we’re speaking to is a small brand, number one. Number two, we are in quite advanced stages. And I would not want to comment right now, but with probably one or two brands, we’re trying to — if we are able to crack it, it will be like we would have another tick mark on this thing. It will help us take us to a very — a different orbit altogether, let’s put it that way. So quite in advanced stages hopefully, but these things take time. So hopefully, should be able to share some good news.
Naysar Parikh
Okay. Got it. All the best.
Abhinav Kumar
Thanks. Thank you.
Operator
Thanks, Naysar. And we’ll take the next question from Nilesh Jain. Nilesh, you can go ahead, please.
Nilesh Jain
Hi, Abhinav. How are you?
Abhinav Kumar
Hi, Nilesh. Good.
Nilesh Jain
Yeah. There was recently a new EBO in my area. So I was just checking out in Kandivali. I just wanted to understand the strategy in terms of what’s the store size you’re looking at because when you add more brands in future, comparatively I think it’s a smaller store to what we have in Infiniti Mall in Malad or elsewhere. So just wanted to understand what’s the minimum store size you’re looking at. And how do you decide on that we should select this area? Yeah.
Abhinav Kumar
Yes. So that’s a very interesting question, Nilesh. I would love to sort of answer this in a little detailed manner. So EBO is a strategy that we are very, very focused and seriously working on, right? So now there are a couple of — there are different vehicles to it or let me say different buckets to it. So one bucket is where you’re expanding through your FOFO, which is a franchisee-owned, franchisee-operated. So the Kandivali store that you would have seen is a franchisee store. And we’re very focused and serious about expanding that as well. So we want to expand the store count. And now we had a large internal discussion debate, should we name it Bagline or should we name it like a Bagline Express or something because it will be a smaller format store.
But then finally, we came down to the fact that let’s not name too many different identities, let’s keep one identity. But every nook and corner of the country would have a different sensibility, right? So somewhere if it is a — so you do a store gradation, whether it is an A plus, whether it is an A, whether it is a B location. And probably the price points or the consumer offering might vary basis that. But we want to grow the entire franchisee network and franchisee stores because we’re seeing a green shoot over there, number one. Number two, on the store size, as we are increasing the brand, yes, there is a pressure of increasing the store size, right?
And in fact, I want to sort of experiment with a very different format of stores, which we’ll probably start with one store where I want to create a big space, sort of a category killer, sort of something that nobody else has done until today in India, at least in our category. But sort of giving a consumer a very different sort of an experience. So can we create 1,500 to 2,000, 2,500 square feet of sort of space where you give the consumer a completely different experience, right? And that’s something that then can lead to sort of premiumization, lead to a better consumer connect and all of that. So we would be experimenting with those size stores also. But as of today, if you ask me, we are looking for a size of about 800 to 1,000 square feet new stores so that we are able to incorporate more brands in those stores.
Nilesh Jain
Yeah, thank you for the detailed answer. My last question is looking at the long-term picture given Tommy is right now 80% of your sales, what’s your broader picture in the next, say, three years, five years down the line? How much contribution would you want from Tommy and then obviously, if you keep on adding more brands what’s the picture? What’s the vision basically you have? Because ultimately — if I look at Bagline, I should not only look at Tommy. I mean, I should have various brands.
Abhinav Kumar
Yeah. See, as I said, we are in the phase where I believe from a long term, if I talk about five years, 10 years down the line, at — I’m a very patient man. So we think whatever we think, we think long-term. We don’t think short-term. From a long-term perspective, I still believe that the overall category, our entire brand play in that category, we have a brilliant future, no doubts about that. We are in the right categories at the right time with the right brands and now we are further adding great brands to our team. So I would say couldn’t have been in a better situation, right, no complaints on that. But as the brands come in, they take a little time to sort of unfold to get seasoned [Foreign Speech] where you’re cracking the right product at the right price point for the right brand. So it takes a little time.
So right now, I say that we are in that formative year where we are now adding brands, putting in the right team, putting in the right structure. But if you talk about, say, five years, seven years down the line, I see Tommy obviously still growing with us. Gomathi is still the biggest single brand that we will have, but at the same time, I would wish to see that Tommy is now only 50% of our sort of portfolio. So if Tommy, for example, today is whatever, INR200 crores, INR250 crores, INR200 crores odd, I would say that by then even if Tommy would have grown to a INR300 crores, INR350 crores, it still should be 50% of our turnover. So that’s the vision that we see. And preparing ourselves, all the steps that we are taking, we are taking with that vision in mind. So I hope I’m able to answer your question.
Nilesh Jain
Yeah, definitely. I mean, just to follow-up on this. I mean, since today you have added to…
Abhinav Kumar
[Foreign Speech].
Nilesh Jain
No. Not on the numbers part, but I mean, just understanding the strategy part. So you added UCB and Aeropostale last year. So I mean, what’s your strategy in terms of if I say certain brand does not work, so how patient you are, how many years you want to give one cycle, two cycle and…
Abhinav Kumar
Two years. [Foreign Speech] So it takes as good as eight, nine months to sort of launch. So certain product categories, we are able to launch earlier. So for example, small other goods are still a little lower development cycle, but backpack would still have a mid-cycle, luggage is a very large cycle, opening molds and everything, it takes a lot of time. So roughly, you can easily say that eight months, go in just sort of launching your first set of products, right. [Foreign Speech]. So I would say that once you’ve launched, we should have a patience of three to four seasons. Every season is about six months, yeah. So we need to have a patience about three to four seasons before we take a call on the brand.
Now, even after three to four seasons, if the brand is not working in any particular category might be that the whole brand is not working, you cut off the whole brand. We’re passionate about our business. We’re not emotional about the brands. That’s the beauty of being into licensing. If something is working out, it’s good. It’s not working out, you pay whatever you are this thing and get out of the contract and shut the brand. It could also be a possibility that a brand might be working in one particular category and the other particular category the brand is not able to work, you cut off that category. So all those permutation combinations you will always have.
Nilesh Jain
Right. Yeah. Thank you and wish you all the best.
Abhinav Kumar
Thanks. Thanks, Nilesh.
Operator
Thanks, Nilesh. We’ll take the next question from Sunandha Joshi. Sunanda, you can go ahead, please.
Sunandha Joshi
Hey, hi. This is Sunanda Joshi’s husband. So we actually invested together. So I will be asking the question. Thanks for oppurtunity. So sir, I just wanted to ask like given that current market slowdown is going and the environment is tough. But at the same time, what are the strategic initiatives that we are taking, let’s say, whenever the cycle does, maybe it’s two years, three years down the line. So we will be in a position to gain market share and much better place in terms of competition. So that’s the question number one. Second question is given the current market drawdown in the market cap that we are facing, so do you plan to add into long-term position in the company from your end as well? So these are the couple of questions which we have.
Abhinav Kumar
Okay. So we’ll come to the second part later. So first part, on the overall market this thing, yes, the strategic initiatives or the strategic calls that we are taking today are increasing our network, number one, increasing our reach to the end consumer, so hence, increasing the point of sale. So we’ve been doing a lot of business development. We’ve opened new stores in this year. In H1, we’ve opened about eight to 10 stores, about eight stores in H1 we’ve opened. And as we are going forward, we’re opening more stores, we’re trying new formats. So one is increasing our reach. We’ve increased our penetration with most of our large partners, most of our department store partners. We’ve increased our market place operations.
So when it comes to e-commerce, now our marketplace operations is almost towards about 38% to 40% of our overall e-commerce. So our marketplace is strengthening. So we’re doing all these activities so that tomorrow once the overall consumer demand, overall consumer sentiment is back, we get a cascading effect of — so today, you were operating at 100 point of sales and now you’re operating out of 150 point of sales. So once the consumer sentiment is back, you get the advantage of the entire 150 point of sales rather than just the 100 point of sales that you were available at.
Apart from this, we are also doing a lot of activities when it comes to product strengthening, when it comes to premiumization, when it comes to introducing categories or introducing products, which were probably not there in your portfolio or not focused upon in your portfolio. So we’re working a lot on those product additions as well. And last but definitely not the least, this is the right time when we are gathering a few more brands to fill up those different price points, to fill up probably certain higher price points, certain lower price points. So we’re trying to do all of this so that when eventually the markets turn back, you start getting a cascading effect of all these activities.
Sunandha Joshi
Okay. Sir, anything on digital front, like in terms of one was on the e-commerce side. Secondly, I was reading some of the previous con call where you were mentioning about building a platform and anything on like mobile apps and all those things? So anything on that line?
Abhinav Kumar
We already have our website, in fact, Bagline.com. We already have that. We are now, in fact, revamping that whole strategy. So we did a decent amount of sales last year, decent in the sense, again, a small number itself, but I think we did still decent, but again, the traffic was driven through all those — your performance campaigns and digital marketing and all of that. Now we’re sort of experimenting with a different route where I’m saying that what would Bagline eventually stand for in terms of an e-commerce player, whether we are an e-commerce player or whether it is an omnichannel drive that we would want to do? So we’re sort of taking more the omnichannel route where we want to explore the entire.
We don’t want to — again, as I said, today, if you look at even e-commerce, during this just to quote an example. During the last BBD, the big sales, which all these guys do, Safari luggage, for example, cabin size for a few days was available for INR960, right? Most of the days today, if you look at it, is available at right, from INR1,100, INR1,200 INR1,300 for a cabin size luggage. [Foreign Speech]. So whether Bagline will stand as a e-commerce channel in front of your Flipkart’s and Amazon’s where luggage is being sold at INR1,000, INR1,500, do we want to take that route? Probably not. I don’t feel that we should be taking that route. I’m very clear on that. So we want to take a very, very nuanced route. We want to take an upgraded route. So we’re going to be sticking to that and hence, reviving the whole strategy behind Bagline.
Sunandha Joshi
Okay. That answers my first question, sir. If you can throw some light on second one.
Abhinav Kumar
Second one, I didn’t exactly understand your — this thing. So not very, very well versed with the market terminologies of long-term holding [Foreign Speech].
Sunandha Joshi
Yeah. So I just wanted to know like given there is a drawdown and it’s nothing to do with you. It’s just market. And given that you have better hold, you see the long-term vision. So are you planning to increase your holdings in the company given this opportunity, which is happening in the market?
Abhinav Kumar
That’s a very interesting question. So I think last this thing I — so if I could answer about myself, will not be in a position to answer about the promoters, the other promoters right now. But answering about myself, my first ESOP tranche matured and I exercised that. And there is a tranche which is going to happen every year. So I’m going to be exercising all those tranches. But at the same time, all these tranches also lead to a huge income tax to be paid, right? So you might be seeing some sort of sales also from my side, more to meet out those income tax requirements. But otherwise, yes, the intent is my net shareholding, you’d be saying that it will be going up. Yeah, so that happens only in the case when you know you’re sure, you’re committed and you understand that this is the game that I would want to play in the long term.
Sunandha Joshi
Thank you. Thank you very much for answering the question.
Abhinav Kumar
Thanks, Mr. Joshi.
Operator
Thanks, Mr. Joshi. We’ll take the next question from the line of Shrinjana Mittal. Shrinjana, you can go ahead, please.
Shrinjana Mittal
Hi, thank you for the opportunity. So a couple of questions, Abhinav. One is that if you can give us some breakup of the — like what has been the growth performance in the Travel Gear and the small leather goods H1 to H1? Just wanted to understand the category-wise performance.
Abhinav Kumar
Okay. So if I talk about overall SLG, small leather goods, so small leather goods we’ve grown by 12% year-on-year, H1 to H1. Women handbags H1 to H1, we’ve grown by 40% and Travel Gear H1 to H1, we’ve grown by about 6%. So even in Travel Gear, if you see, we’ve grown in luggage. We’ve grown in bag pack. We’ve grown in business cases and luggage is a double-digit growth. So we’ve grown by 13% in luggage. Bag pack, we’ve grown by 10%. However, overnight which was a category and there was one particular ASN which had become extremely popular in e-commerce, but the pricing was not conducive for our brand and it was getting heavily discounted. So as a strategic this thing, we took a call on that overnighter and we sort of got out of that ASN.
So if I — and that’s the reason, okay, because you asked me category-wise and all of that and hence, I would like to answer a couple of more points while answering your question is that when we talk about growth yes, at the end of the day as investors, you see only the end result, which is the top line, right? Whereas obviously, it’s my job, it’s my responsibility to sort of deep dive and understand each channel and each category. So by quoting I could have easily given a narrative that you know what we are doing actually great. If you just take off that institutional sale, which was a one-off sales, we’ve actually done very good, right? Every channel we’ve grown, every category we’ve sort of grown, even when everybody else is struggling, even at that higher price point, we are growing.
If I talk about my PBT, my EBITDA percentage is in spite of growth — overall revenue growth being flattish, if I talk about my EBITDA percentage degrowth, it is hardly 1% or 1.5%, right, at best. Our gross margins have improved. My PBT is almost equivalent to last year. But my interest cost and depreciation was obviously much higher than last year because on account of the expenses that we’ve made towards the new plant, the new office and everything, which is still to give you result, right? So while the capex has happened, the expenses are happening. So in spite of all of this, I think we’ve been able to perform really well. But all of this summarizes to the end with one figure. Now that one figure comes with a lot of strategic calls that we have to take.
I mean that — the overnighter business, you would have lost almost I think close to INR10 odd crores only in this H1 on that overnighter business, but we still pulled a plug to it because we don’t want to discount the brand. We don’t want to create a perception of the brand. So many a times, you take such calls where you know that [Foreign Speech], but it’s not good for the brand health. Let’s take a call on this today. And probably, there will be time when you will again be able to build on something better. So while you would be seeing growth in all the categories, the Travel Gear [Foreign Speech], we’re still sort of posting sort of a flattish figure. I don’t know if I’ve been able to answer your question.
Shrinjana Mittal
No, that’s very detailed, Abhinav. Thank you. Actually on that, just continuing with that thread, so you mentioned before also the institutional business. So like now what would be our approach going forward, like when we get such institutional orders, like would we be willing to take it up on — even if it’s a short-term order where we don’t see such longevity, like what would be your approach from now on?
Abhinav Kumar
See, if you get an institutional order, we should, but if it is coming on our terms, if it is giving me a good gross margin, why shouldn’t I be taking it? Now should we be growing that as a channel? Yes, we are trying to grow that as a channel. But those one-off deals, sometimes it happens, sometimes it doesn’t happen. But why wouldn’t we take it? [Foreign Speech] we will do it.
Shrinjana Mittal
Understood. And like what kind of business is this? Like is it like corporate gifting or like what would be the exact nature of these institutional business?
Abhinav Kumar
See, ideally institutional business is this corporate gifting itself, right, which are these institutional businesses. But sometimes, there are certain strategic things where like, for example, in this case, we had done a special program with Shoppers Stop and Shoppers Stop did a similar program with American Tourister this year, this season last year, they had done it with us. And their response in American Tourister was not even half as good as what we did with them, right, when they did it with Tommy. But would we want to do that every season with them? No. We wouldn’t. So they have to take the call also as a brand that [Foreign Speech] so that we populate, consumers get to experience, it’s more of a marketing also included in it. But would you do that every season? Probably not. So hence, it’s not cyclic in nature. The corporate gifting [Foreign Speech] all of that keeps happening. That is of a cyclic nature.
Shrinjana Mittal
Understood. Understood. And Abhinav, on the IFF Overseas integration, like when should we expect that to come?
Abhinav Kumar
I think by December end or say beginning of January, another 40, 45 days, we should have the approval from NCLT. So I think within this financial year, this thing will be done, the merger will be done.
Shrinjana Mittal
Okay. Got it. Just one more question. Like I don’t know if I missed it if you mentioned it before, I joined a little bit. So like what is the plan for store expansion? And like how are we trying to grow that channel?
Abhinav Kumar
We are looking at expanding in all accounts. So yeah, I mentioned about we expanding into franchisees also. So we’ve opened a lot of franchisee stores this year. We are also experimenting with new format of stores, so probably a bigger, better store where we are able to include all our brands and going forward also, the pipeline of brands that we have which we are speaking to. Once all these brands are there, we would need a significantly larger space. So as we speak, the overall new store identity and all that is being worked upon. So we’re very, very serious on that taking the store count up. So I think another 18, 24 months, I can safely confirm that we’ll have 100 stores. Now we are — the store count is about 46, 47.
Shrinjana Mittal
Understood. No, thank you very much. Thank you for taking my questions and all the best.
Abhinav Kumar
Thanks. Thanks, Shrinjana.
Operator
We’ll take the next question from the line of Sharad Anuragi. Sharad, you can go ahead, please.
Sharad Anuragi
Hi, Abhinav. How are you?
Abhinav Kumar
Good, Sharad.
Sharad Anuragi
Yeah. I saw a spike in borrowing for the first half. Just wanted to know down the line since the demand is not coming through the whole consumer sector…
Abhinav Kumar
It is more on the term loans and all of that for the new plant.
Sharad Anuragi
Okay. Okay. So this won’t be showing up in the coming quarters.
Abhinav Kumar
Once you’ve taken that money, it’s there.
Sharad Anuragi
Okay.
Abhinav Kumar
So as you keep — and not keep on going up.
Sharad Anuragi
Yeah, that’s what I asking. It won’t go up, right? It would stay at the same level.
Abhinav Kumar
Similar level. Whatever stage-wise linked, for example, now we’ll be making the final payment towards the machinery once the machinery is sort of quality checked and the trial run is set in its source factory, then the payment will happen. So whatever stage-linked monies would be coming in, just seeing an uptick in that.
Sharad Anuragi
Okay. Okay. Got it. And the new brands that you were talking about, you are in talks with, would this be the direct contracts or they would be through the India comp about?
Abhinav Kumar
Actually there are multiple of them that we are talking to. So some of whom are direct also, a few of them are direct also and a few of them might be through their India counterpart.
Sharad Anuragi
Okay. And talking about JC, is it going to follow the same eight month cycle for the first quarter to it or it’s going to take more time?
Abhinav Kumar
JC, in fact, I would give it up to my team that they worked really, really hard on creating the first line. And see, I have my fingers crossed, but I have never — have been absolutely transparent always. So we are looking at — I would love to launch it in this March itself. So we sort of something which ideally takes at least six to eight months. Here, I think we’re launching it in just four odd months. First launch will happen in Feb, March. If everything goes well, I have my fingers crossed, if everything goes well, March would be our first launch.
Sharad Anuragi
And would that be through an EBO or through the online channel?
Abhinav Kumar
We’re already looking at opening a couple of stores. So we are reaping in touch with one or two good prominent malls. So we’re looking at opening one or two stores for sure. I would love to have at least two stores, if not one during the launch. But at the same time, we are also partnering with the key department store chain with a key large format player and we’re planning for a mega launch with them as well. So we’ll take the retail route. We will also be obviously available online, but initially we want to take the offline retail route launching the brand in its full glory.
Sharad Anuragi
Right. Because it’s important for the customer to get the feel of the fun.
Abhinav Kumar
Yes.
Sharad Anuragi
Yes. And last quarter, we talked about — you said you’re planning for other brands to put their products on your online marketplace that is Bagline? Any update on that or…
Abhinav Kumar
As I said, while we got a few proposals and everything, but we’ve right now put them on a back burner, I’ll be very transparent and honest on that. We’ve put them on a back burner. As I said, here, when you see luggage and all these getting sold at INR1,000, INR1,100 now, A, you feel sad and B, you start questioning what should Bagline’s identity be? Are you there to compete with these guys or are you there for a different cause. So we’re sort of doing some corrections over there. We’re trying to explore a different route over there. So till the time, I’m 100% sure that, okay, this is what we stand for. This is where we want to hit. Till then, we are restricting any outside brand. As we speak, there are a couple of brands that we have — the work is happening parallelly. It’s not that we’ve stopped one thing for the other. The work is happening, parallelly, but we’re taking our time to sort of get it right.
Sharad Anuragi
Okay. And just wanted to know between this subdued demand, how has been the inquiry for franchisee stores from your end, if you can give some…
Abhinav Kumar
Past couple of months, it’s sort of [Foreign Speech] I would agree to that. Initially and last year when we launched the campaign and [Foreign Speech], there was a lot of inquiries. And hence, we saw — post the campaign, I think we would have opened some 12, 13, 14 stores, out of which two would be COCO and rest all would be FOFO stores. So that ways we were getting inquiries. We still are. It’s not that we don’t have a store pipeline as of today. We have store pipeline, we have demands. But to answer your question, the demand has gone down a little bit [Foreign Speech].
Sharad Anuragi
Right. And just the last question. I wanted to know that when [Technical Issues].
Operator
Sharad, you are not audible.
Abhinav Kumar
You’re not audible, Sharad.
Sharad Anuragi
Yeah. Sorry, I was having some problem with the network. Yeah. Can you also from the next quarter maybe give some details on the number of units sold, would that be possible from your end?
Abhinav Kumar
Sorry, number of — volume-wise?
Sharad Anuragi
Yeah.
Abhinav Kumar
Yes, volume-wise, exactly [Foreign Speech], but if you’re asking more from a volume-wise growth perspective, something I can probably…
Sharad Anuragi
Yeah, maybe not the exact number, just qualitative outlook from your end.
Abhinav Kumar
For the next quarter, you’re saying or…
Sharad Anuragi
No. For the current quarter. Obviously, you would be having it for the next quarter, right?
Abhinav Kumar
Okay. So yes, I think volume-wise, see, small leather goods, I think we would have had almost a 10% kind of a volume growth. Travel Gear, I think we have close to a 5% kind of a volume growth. Women handbag, in fact, we’ve had a quite a bit of a volume growth. But the base was also small, but we would have grown more than 30%, 35% — actually more than 40% in terms of volume growth. So more than 40% in terms of volume growth. Travel Gear would be about 5%.
Sharad Anuragi
Okay. Okay. I just wanted to understand the role of inflation in that particular category. Thank you. That’s it from my end. Thank you very much and all the best.
Abhinav Kumar
Thanks. Thanks you.
Operator
Thanks, Sharad. Sir, due to time constraint, that was the last question for the day. I now hand over back to Vinay, sir.
Vinay Pandit
Thank you. Abhinav, would you like to give any closing comments before we end this call?
Abhinav Kumar
Yeah. I just want to mention that whatever — all these discussions and everything, I just want to say that while yes the market conditions are not very good and I think everybody is sailing in the same boat. But all the calls that we are taking now only time will prove whether they are right or wrong. But all the calls that we are taking, we are taking all the calls from a very long-term perspective. And you would want to have — we stick by our philosophy of being a fashion brand, branded play in the accessory segment. That’s our core value that we thrive upon. And hence, we’re sort of abiding by that. And I believe that all the data points that we track, we are still very healthy, which is what I would want to just say by concluding. So hopefully, once the demand, once the overall consumer sentiment and everything is much better, we’ll be able to come out with much better colors.
Vinay Pandit
Sure. That is the end of today’s call. Thank you to the investors for joining on the call. Thank you to the management team for giving us the valuable time.
Abhinav Kumar
Thank you.
Vinay Pandit
You may not disconnect now. Thank you.
Abhinav Kumar
All right. All right. Okay.