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Friday, 28 October 2011 |
Provogue India stocks have been witnessing a sharp
fall since last three years, when stocks based on consumption theme are considered most sought after even when the markets fall drastically. Unfortunately, Provogue’s stock has not been able to perform. During the recessionary phase, many premium retailers such as Provogue got affected. Provogue’s stock took a sharp dive on flat revenues. FY-09 saw a sales growth of just six per cent. However, even as sales gradually recovered and Provogue began posting healthy revenue and profit growth, it once again experienced losses due to their plans of getting into real estate business.
The company planned to develop malls in smaller cities through a joint venture. But the slowdown and real estate delayed execution, with the first mall coming up only in late 2010. It further faced road-blocks with many malls coming up the same area posing stiff competition. As a result, they had to shift focus into housing projects in a few cities. A levy of excise duty on branded garments, high input costs and inflation biting into disposable income of consumers further dampened apparel sales even in 2011, which lead to Provogue suffering two consecutive quarters of flat revenue growth. The March and June quarters saw growth of eight and four per cent respectively, compared to the year-ago periods. |
