Outlook
Investment Outlook
Brandman Retail presents an interesting opportunity in India's growing premium footwear market. The company has demonstrated strong financial performance with 153% PAT growth (FY25) and healthy 23% EBITDA margins. The Sneakrz expansion strategy (targeting 50 stores by 2029) provides a clear growth path. However, investors should note the significant concentration risk (72% revenue from New Balance) and non-exclusive distribution agreements. The NSE SME IPO offers exposure to premium footwear retail at an early stage.
India Apparel & Footwear Market
Online channels will contribute a rising share of sales, but physical stores will remain central to discovery and experience.
Structural Drivers
Emerging Trends
Expected to outpace traditional apparel categories as fitness and casual wear converge.
Growing consumer interest in eco-friendly and ethically sourced products.
Wider adoption of AI, augmented reality, and data-driven personalisation.
Increasing emphasis on in-store experiences to complement online channels.
Sneakrz Expansion
Aggressive expansion of multi-brand Sneakrz stores from 2 currently to 50 stores by 2029. Each store offers multiple brands, reducing single-brand dependency.
Brand Portfolio Diversification
Adding new brands to reduce New Balance dependency. On Running added in 2024; potentially more brands in pipeline to diversify revenue.
Geographic Expansion
Expanding beyond metros to Tier 2/3 cities. Current presence in India; distribution agreements cover Sri Lanka, Nepal, and Maldives.
Digital & D2C Growth
Strengthening e-commerce presence through marketplaces (Amazon, Flipkart, Myntra) and company website to capture digital-native consumers.
Critical Risk: Brand Concentration
72% of revenue comes from New Balance. Loss or reduction of this distribution agreement would materially impact the business. The agreement is non-exclusive, meaning New Balance can appoint additional distributors.
Brand Dependency Risk
New Balance contributes 72% of revenue. Termination or non-renewal of distribution agreement would severely impact business.
Non-Exclusive Agreements
All brand partnerships are non-exclusive. Brands can appoint additional distributors or go direct-to-consumer.
Execution Risk
Ambitious Sneakrz expansion (2 to 50 stores) requires significant capital and operational capability. Execution delays possible.
Competition Intensity
Faces competition from Nike, Adidas (direct), Metro Brands (retail), and e-commerce platforms in premium footwear segment.
SME Liquidity Risk
NSE SME platform typically has lower trading volumes. Exit may be challenging for large positions.