About the Company:
The company operates globally in the design, development, sourcing, and distribution of ready-made garments and consumer products. Its business is segmented into several areas, including design-led sourcing, sourcing as a service, manufacturing, brand management, and venture investments. The company has a strong focus on fast fashion, catering to major global retailers and brands. Its extensive sourcing network spans across multiple countries, with a significant portion of revenue generated from the UK and Europe.
The company also maintains in-house manufacturing facilities in Bangladesh and Sri Lanka, producing a wide range of garments. Additionally, the company invests in innovative ventures related to apparel, sustainability, and circularity. Client concentration is notable, with the top 20 clients contributing to a substantial portion of its revenue.
Our investment interpretation :
Through our detailed analysis, we identified this company as an asset-light platform business that stands out due to its entrepreneurial structure. Its innovative business model, combining a central design team with an entrepreneurial operating approach, allows for both flexibility and scale, creating significant value for its suppliers. By leveraging its size and capabilities, the company offers substantial benefits to garment manufacturers, helping them scale efficiently and achieve better operational outcomes.
We also recognized the company’s strong credit rating, a testament to its robust financial position. It plays a crucial role in managing raw material sourcing, design, quality control, compliance, and logistics on behalf of its clients, allowing them to concentrate on product quality and customer satisfaction. This outsourcing theme further enables the company to scale while managing the complexities of a global supply chain.
Our conviction in the company was built through extensive questioning of our own thesis, which reinforced our belief in its long-term potential. We exhibited patience when the stock price remained stagnant for the first 3-4 years, and this high level of confidence has kept us invested, allowing us to capitalize on the company’s sustained growth and market leadership.
Returns:
MCap on date of Investment: INR 444 Crs.
MCap on date of Exit/ Today: INR 7,776 Crs.
Multiple on Invested Capital (MOIC): 18x
