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Metro Brands hopeful of maintaining high-teen growth, plans 260 new stores

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Metro Brands hopeful of maintaining high-teen growth, plans 260 new stores

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As Rakesh Jhunjhunwala-backed Metro Brands' shares list on BSE and NSE, CNBC-TV18 spoke to the company's management, CEO Nissan Joseph and Managing Director Farah Malik, on what the road ahead looks like for the Mumbai-based multi-brand footwear retail chain.

Metro Brands is hopeful of maintaining a growth rate in high teens, something it has clocked over the past 10 years. CNBC-TV18 spoke to Metro Brands' CEO Nissan Joseph, and Managing Director Farah Malik as the Mumbai-based multi-brand footwear retail chain's shares began their journey in the secondary market on Dalal Street.
Legendary investor Rakesh Jhunjhunwala-backed Metro Brands' shares listed at a discount to its issue price earlier in the day. The stock debuted on BSE at Rs 436 apiece, a discount of 12.8 percent to its issue price of Rs 500. Metro Brands shares listed at Rs 437 apiece on NSE, a discount of 12.6 percent.
The weak listing of Metro Brands shares comes at a time when most IPOs have received a robust response from investors, though the recent sell-off in the market has dented the appeal of the recent debutants. The listing was in line with the trend seen in the grey market.

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Joseph said the company is seeing demand across multiple categories. "All of our four concepts -- Metro, Mochi, Walkway, and Crocs -- are doing extremely well compared to pre-COVID numbers. More importantly, all the categories that we sell, are selling extremely well,” he said.
“Metro has shown through its financial discipline and operational rigour, and is able to maintain its margins; it is able to maintain its profitability. We have had a CAGR growth of over 17 percent. If you look at the last 10 years, we are still running in the high teens, and that is enviable, not only as a company but definitely in our industry,” Joseph added.
The salaries of Metro Brands' entire staff are linked to sales, the company's management said.
“If you look at our entire team, whether it is the front-end, the back-end or the buyers, we have a very entrepreneurial culture," Malik said.
“We tweak our merchandise. So if during COVID, we saw a huge increase in sportswear, in-home wear, either through our own brands or through our complementary brands that we keep, we will increase the bouquet of offering to the customer, with the focal point being the customer,” she added.
Metro Brands is among the top three brands on e-commerce platforms, the management said.
Malik said the e-commerce space was at 1.5 percent of sales before the pandemic. "If you look at even the marketplaces which are a very large part of the e-commerce space today, we trend in the top three brands in most of the marketplaces in the fashion category... If you look at our offline sales, 90 percent of our sales are full-price sales, and only nine percent discounted sales,” she added.
The management also said that all of the company's stores are functional now.


“All our stores have opened up; our rents continue to be on par with what they run. Traditionally, we were able to get some rent relief from our landlord partners... from our major mall operator partners over the COVID period,” said Joseph.
Metro Brands plans to open 260 stores in the next two-and-a-half years.
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