Due to subdued market conditions in UK, Europe and Asia Pacific, the international business of company declined during the year.
During the year under review, as well as during the previous year, the Company has not transferred any amount to the General Reserves. As on 31st March, 2018, Reserves and Surplus of the Company were at Rs 443.68 crores. An amount of Rs 200.71 crores is proposed to be retained as surplus in the statement of Profit & Loss.
During the year under review, VIP Industries BD Manufacturing Private Limited and VIP Luggage BD Private Limited have been incorporated as wholly owned subsidiaries of the Company.
Total remuneration paid to Directors/Key Managerial Personnel this year was more than 10 crores.
Percentage increase in median remuneration of employees this year was more than 14%. Number of permanent employees is 2099 while number of temporary employees is 2970.
Hard luggages accounted for 24% of company’s turnover while soft luggages accounted for rest 76%.
Rakesh Jhunjhunwala held 3.69% of total shares of the company while Sudhir Jatia(Safari owner/Ex-VIP) held 1.36% vs 1.89% last year.
There was a good growth in the luggage and bags industry during the year 2017-18 due to strong consumer demand but there were lot of uncertainties due to implementation of Goods and Service Tax (GST) with effect from 1st July, 2017. While the first half of the FY was a bit subdued due to 28% GST rate, second half was better as GST rate was reduced to 18%. GST is good for organized players in the industry as it reduces the price gap between organized and unorganized players by bringing the latter under the tax net.
Domestic Luggage and bag industry grew on the back of strong consumer demand. Increased consumer demand for luggage was due to increase in travel, demand for short haul bags, growth in personal disposable incomes and increasing fashion consciousness and aspiration levels. Bags and luggage are becoming status symbols as they are considered lifestyle products helping wider acceptance of fashionable and high-end luggage.
There is one more interesting development towards preference of each member of the family to carry her/his own luggage. This is in contrast to yester years when entire family used to travel using just a single bag. Children also like to use their own piece of luggage/bag. This is also helping to fuel the growth of the industry.
New luggage categories like Polycarbonate uprights and backpacks have registered very good growth whereas traditional categories like PP hard luggage suitcases continue to decline. This is happening across all geographies including the country’s heartland, which used to be the stronghold for traditional luggage.The shift is due to change in consumer preferences towards the convenience of light and wheeled travel products as compared to heavier luggage.
Backpacks and handbags category registered tremendous growth as company further increased its focus with new launches and advertisement.
Traditionally strong categories like Duffle bags and Soft uprights also registered very good growth.
Hypermarket channel continues to witness strongest growth. E-commerce channel is the channel to look out for in near future even in tier 2 and tier 3 towns.
Skybags continues to do very well and is now the largest luggage and backpack brand in the country. VIP continues to enjoy a heady market share and is on top of the mind brand when it comes to family travel
Aristocrat, the value brand of the Company, saw an extremely good year and was the fastest growing brand. There is huge scope in the value segment of the market and we are well poised to grow our business in value segment.
With Carlton, the brand for the new-age business traveler, we are tapping the high-end market where customers are discerning and willing to pay a premium for good bags. This segment is growing well and with Carlton we are poised to do very well in this segment. With Lifetime warranty for Carlton Edge ranges, we expect further good growth in the premium segment.
Caprese, the ladies handbags brand(now available at more than 1000 points of sale), has registered extremely good growth. Caprese has successfully established itself as a purveyor of international fashion and witnessed heightened brand awareness by delivering successful advertising campaigns with Alia Bhatt, the brand ambassador, that have resonated with Indian consumers.