Ladies and gentlemen, good morning and welcome to the Go Fashion (India) Limited Q3 FY25 earnings conference call. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gautam Saraogi, Chief Executive Officer. Thank you, and over to you, sir. Good morning and warm welcome to everyone present on the call. Along with me, I have Mr. R. Mohan, our Chief Financial Officer, and SGA, our Investor Relations Advisor. I hope you all have received the investor deck by now. For those who haven't, you can view them on the stock exchange and the company website. The apparel retail demand remains weaker than expected, driven by the underwhelming festive season and decreased consumer spending on discretionary items. Despite the same, we at Go Colors continue to meet expectations and have continued to maintain our growth trajectory. Revenue from operations for the nine months grew by 11% to INR 643 crores, with the EBITDA which grew by 9% at INR 206 crores. Same-store sales growth remained flat, reflecting the subdued market environment, as highlighted heightened inflation prompted customers to postpone discretionary apparel purchases. Despite this, we upheld good P&L hygiene and achieved impressive EBITDA margins of 32%. This performance was through strategic cost control measures and disciplined discounting practices, demonstrating our ability to maintain profitability irrespective of the challenging demand landscape. Our full-price sales ratio accounted for 95.1% in a challenging demand environment. This underscores strong consumer loyalty and acceptance of our product and pricing. Our brand's ability to not rely on discounting sets us apart from our peers. Over the last few quarters, large format stores segment have encountered some challenges, reflecting shifting market dynamics and evolving consumer preferences. However, we remain confident in the resilience of the space and anticipate strong rebound in the coming quarters, driven by strategic initiatives and improving market conditions. As of December, our average selling price stood at INR 769, driven by a favorable shift in our product mix. Over the years, we have seen significant transformation in our mix from our earlier reliance on leggings and churidars. This shift underscores the strong market acceptance of our value-added products and reflects our evolution and comprehensive bottom-wear brand capable of catering to diverse customers across all categories. Our strategy remains focused on being a one-stop solution for all of women's bottom-wear needs, offering a broad selection of products at affordable prices to a diverse customer base. These factors will support our growth trajectory moving forward. I'm also pleased to share that we are on track of opening our first store in Dubai, and our store should open by April 2025 through Apparel Group. Moving on, operational metrics of Q3 and nine months FY25 have advertising spend as a percentage of revenue stood at 1.9% for the nine months. We have strategically taken a call to keep it intact because of the sluggish demand environment. We continue to rationalize our smaller stores and plan to phase out another additional 10 to 15 stores in Q1 this year. This will be the last set of small stores closures. Based on observations, we are confident that the sales from these smaller stores will eventually seamlessly transition into the larger stores. In line with the approach, we opened 61 new stores and net stores on a net basis for the nine months FY25. And for the full year, we plan to do a total between 80 to 90 net additions. Our EBO channel revenue for nine months FY25 stood at INR 463 crores, reflecting an 8.5% year-on-year increase. This growth can be attributed to the core nature of the product offering, which has been less impacted by the sluggish demand compared to other categories. Given our diverse portfolio and large amount of SKUs, we continue to maintain decent inventory levels at 99 days as of December 2024. For the full year, we anticipate our inventory days to stabilize between 90 and 95 days, ensuring operational efficiency and healthy working capital management, generating decent and high operating cash flows. Our strong focus on inventory and working capital efficiency will help us achieve our target of converting more than 50% of our EBITDA into operating cash flows. We are on track to achieve the same for FY25. Way forward, our first step is to achieve low single-digit SSSG in FY26. Second would be grow our footprint, increasing the number of stores in our portfolio. For FY25, we aspire to open around 80-90 net additions store openings. Going forward, next year, we aspire to open anywhere between 120-150 net additions for the next year. Lastly, our focus would be to maintain strong check on inventory levels, leading to healthy balance sheet and working capital and improved cash flows in the business. To conclude, the women's organized bottom-wear segment in India is poised for significant growth despite the current tough environment. As fashion trends evolve, there is a growing preference for versatile and comfortable products, which are not only worn on occasions but are everyday in nature and core in nature, which cater to both casual and professional settings. Furthermore, India's expanding urban middle class, increased disposable income, and greater awareness of global trends are likely to drive consumer spending in the segment. As these dynamics continue to unfold, we are set to capitalize this growing opportunity and fuel our growth trajectory forward. With this, I would like to hand over a call to our CFO, Mr. R. Mohan, for the update on Q3 and nine months financial FY25 results and financials. Thank you. Thank you, Gautam, and good morning, everyone. Despite the challenging business environment, the company continues to witness a strong operating performance. First, I will give you financial highlights for Q3 FY25. Our revenues for the quarter stood at INR 250 crores as against INR 202 crores in Q3 FY24, a growth of 6% YOY. Gross profit stood at 138 crores, a growth of 11% year-on-year, with a GP margin of 64.1% for the quarter. Our EBITDA for the quarter stood at INR 70 crores as compared to 68 crores in Q3 FY24, a growth of 3% YOY. Our EBITDA margin stood at 32.5%. PAT for the quarter stood at INR 24 crores and witnessed growth of 4% YOY. PAT margin stood at 11.3%. Coming to the nine months FY25 performance, revenue stood at INR 643 crores in nine months FY25 as against Rs. 581 crores in nine months FY24, a growth of 11% YOY. Gross profit stood at INR 405 crores, a growth of 14% YOY, with a GP margin of 63% for the nine months ended. EBITDA for nine months FY25 stood at INR 206 crores as compared to INR 189 crores in nine months FY24, a growth of 9% year-on-year. Our EBITDA margin stood at 32%. PAT for nine months FY25 stood at INR 74 crores as compared to INR 70 crores in nine months FY24, a growth of 6% year-on-year. Our PAT margin stood at 11.4%. ROCE and ROE, excluding Ind AS 116 impact, as on nine months FY25, stood at 20.3% and 15.8%, respectively. Cash and cash equivalents stood at INR 231 crores as on 31st December 2024. With this, we now open the floor for the questions and answers. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Devanshu Bansal from Emkay Global. Please go ahead. Hi, good morning, Gautam. Thanks for taking my question. Firstly, if only to understand, the growth trends have remained muted. It is also slightly weaker than our own expectations during the course of the year. What are the reasons for this? And also, if you could highlight if there is any significant growth divergence across regions for you? Sure, sure, Devanshu. Thanks for the question, so, Devanshu, I think the difference why this Q3 has been a little bit of a weak performance is because of the festive. I think festive was far lesser than expectations, and we've done our channel checks as well, which is, and it has been consistent across different retailers we have checked, that festive was quite disappointing this time, but what was good about this quarter was that December onwards, the growth trajectory and momentum was good. Like post-December 15th, demand has actually picked up well, and post-December 15th, we've seen decent demand, but the entire festive and post-festive, leading up to December 15th, has been very subdued. Now, as far as region-wise understanding, see, look, I think there are some positives which have come out in Q3 for us. North has actually reported positive SSSG. West India also has reported positive SSSG. South has been a little bit of a drag for us. One of also the reasons for South having a little bit of an underperformance in Q3 is because of extended rains. See, regions like Tamil Nadu, Karnataka, especially in tier two, tier three, the rains actually, the monsoon actually continued into December, so some part of December sales actually kind of weakened the sales for South, and that's why South Q3 SSSG has been a little on the weaker side, but the positive side of this quarter is that West India has had actually low single-digit SSSG, and North India actually has had mid-single-digit SSSG, so we are seeing some kind of improvement in demand when it comes to West and North of India. Understood, Gautam. That is helpful. Just a follow-up on this. So I noticed that particularly for Q3, the full price mix is 95% versus last year it was closer to 98%. So this demand environment which you are indicating after December 15th, is this also due to a start of early EOSS this time around? Can we attribute this to that? Yeah, I think, look, because festive was a little weak in our case, we actually didn't start EOSS very early. We started around the same time which we usually start. But overall market, EOSS this time started a little early because of subdued demand and weak festive. Okay, okay. And Gautam, in other categories, at least like food services, we are noticing that there is big consolidation happening from competition perspective, right? So there is a long slowdown, and there are a lot of store closures that are happening in the sector. So is your space also seeing store closures for competition as well because of this prolonged slowdown? See, well, there is honestly not only competition. If I see among all peers in retail, I think many brands are in consolidation mode because of slowdown in overall apparel and footwear space. So there's a lot of consolidation happening because the same store sales growth are weak, right? People usually tend to consolidate to maintain margins. In our case, we have done some little consolidation as far as small stores are concerned, and we look to close another 10-15 stores in Q4, post which I think we are largely done with our consolidation. So from Q1 onwards, for the next financial year, we will probably see store closures in low single-digit or mid-single-digit. It's not going to happen what happened this year. Next year, like this year, we are going to end up with an 80-90 net addition, which is actually lesser than what we had targeted. See, on a gross level, we are actually closer to 120 this year. Because of our closures, we are going to end up between 80 and 90. Next year, because it's going to be mid-single-digit closures, which happens in the normal course of business, we are very confident that we will be closer to that 120 now without any problem. I have more questions. I'll join back in the Q1. Sure. Thank you, Devanshu. Thank you. The next question comes from the line of Prakash Kapadia from Spark Private Wealth. Please go ahead. Yeah, two questions from my end. Gautam, you mentioned about SSSG being muted. So still not able to understand the actual reason for a flat SSSG because we've been anticipating the demand to come back. So what is really hitting SSSG growth? And historically, if I see Q4 is not a very big quarter. So as we move forward, how do the next few quarters in terms of demand or sales look like? Are there any initiatives internal which we are trying to boost demand, or you think the environment is now better? You alluded to some demand coming back, but some sense on revenue growth going forward will clearly be helpful. Yeah, yeah, sure. Definitely, Prakash. So see, to start off your question on SSSG, right? I mean, look, in this demand scenario, honestly, the fact that we are at flat SSSG is actually, in my eyes, a very decent achievement. If I look around, whatever channel checks I've done, of course, there are some exceptional players in the market who have done double-digit as well. But many retailers, many brands have actually had negative SSSG during these last couple of quarters. So I think in the overall scenario, I think we maintaining flat SSSG, maintaining demand in our existing stores, I think we've done a great job. But the idea is obviously to move towards positive SSSG. So moving forward from strategies perspective, see, a couple of strategies what we are adopting right now because we know that the environment is tough. Though we have always been a cluster-based expansion model, we are also now trying to control our cluster-based expansion model and trying to do more horizontal growth rather than vertical growth. See, I think in the past, we went very deep in clusters and opened more number of stores. I think we will continue our cluster-based expansion model in a more controlled way. I think, so for example, in a market where we see a potential opening four small stores or four medium-sized stores in a particular vicinity, we will open three medium stores instead of opening four small stores. So the idea is to control the cluster-based expansion model so that we don't end up cannibalizing. So that is one of the strategies. Moving forward, also from a growth perspective, I think, look, next year we're looking at a double-digit company revenue growth with a mid-single-digit SSSG. For Q4, we will target a low single-digit SSSG, and the company is working towards that goal. Now we can make this positive. Okay. Fine. Thanks, sir. Thank you, Prakash. Thank you. The next question comes from the line of Sameer Gupta from India Infoline. Please go ahead. Hi, hi, Gautam and team. Thanks for taking my question. Firstly, I'd like to dwell a little bit on SSSG like other participants. So it's been flat now for six quarters. Now, I understand that overall consumption hasn't been in the best of health. But for a brand which is relatively small and young, it still seems an underwhelming performance. You also give some same cluster growth, and I see that that has also now started to moderate. It used to be around 8%-10%. Now it's around 5%. So apart from the broad consumption, which may take some time to revive or we don't have a handle, what are the steps that you are taking as a company to revive this growth? Are there any pilots that you are doing? I understand that the bigger problem is footfalls right now. So any color on your own strategy, your own initiatives will be helpful. See, I'll tell you. Two things we are doing, two things we are doing, Sameer, and one is, like I just mentioned to Prakash as well, on the expansion part, we are not trying to go very deep now. We understand that demand scenario is weak. If we try to go very deep in cluster-based expansion model, I also don't want to end up cannibalizing my own stores, so we are going more horizontal, so whatever expansion we are going with, we are also trying to go to newer cities, new towns so that it is new growth which is coming into the revenue channel, and we are not opening the very small stores right now. What we have experienced when we open our mid-sized stores of 400 sq ft, 500 sq ft, the consumer is actually having a very good experience because of our extended product range. In that 150-200 sq ft, that experience is not coming. So we are also trying to open good experience stores of 400-500 sq ft and move away from the 200 sq ft model. And also, like I mentioned, go more horizontal in expansion rather than going deeper into the same cluster. Second thing, I think, look, we as a company have done fantastically very well in cost control. In an environment where demand is weak, SSG is weak, our actually operating margins and EBITDA margins have not seen too much of a decline. In fact, our absolute PAT has actually grown. I think as a company, our strengths have always been cost control. And future also, cost control is going to be a big positive for us during this weakened environment. I think keeping these two initiatives in mind, if we keep these two initiatives on, once demand revives, it will reflect in the top line revenue and even in the bottom line margins. This is helpful and actually brings me to my second question. So I noticed that on the cost line that you said, so gross margin up 264 basis points, including subcontracting. Employee costs are up 26% and other expenses are up 15% if you exclude ad spends. So just trying to understand reasons for the increase in gross margin as well as the employee and other expenses. It's perfect. Yeah, yeah, sure, sure. So thanks for the question, Sameer. So on the GM part, Sameer, I think, look, I think it's a product mix perspective also. Some of our products which had a slightly higher multiplier and higher GM, those products sold a little more than our other products. That had an impact on the GM to go up. And on the cotton prices as well, I think we've had cotton prices coming down, and I think finally we have seen the full benefit of cotton prices. So we have done a 64% GM in Q4. I think steady state, we see a 62.5%-63% GM on a steady state basis. 64 has been a little on the higher side also because of some product mix which has sold well during festive, which had a slightly higher GM. But on a steady state basis, we see 62.5%-63% of GM on a steady state basis. As far as salaries are concerned, which you very rightly pointed out, see, one of the reasons salary cost has gone up is, see, we've added three LFS partners in this entire nine months. We added Lifestyle, we added Shoppers Stop, we added Pantaloons. So Pantaloons was already there, but we added more number of stores in Pantaloons. So Pantaloons, we added about 70-80 stores. Lifestyle, we added about 60-70 stores. Shoppers Stop, we added 120 stores. So all these stores we have kept employees, which we usually do, is just that these stores in terms of sales are not stabilized because they are fairly new to the roster. So that's why employee cost on an overall basis has seen a sharp increase. But I see this employee cost stabilizing by Q1. See, Q4 anyways is usually a weak quarter in retail. But in Q1, I see this cost stabilizing, and this will come down in proportion to our revenue. So I don't see that as a concern. As far as the other expenses are concerned, where my revenue has grown by 11%, but my other expenses have grown by 16%. See, I think most of these expenses is rent. My rent has actually grown at 13% versus my revenue going at 11%, which is a good thing. So there's not a very big imbalance between my revenue and my rent. And my other expenses are just variable expenses, which are more linked to revenue anyway. So that also, the 16 and 11 is not a big concern, but Q1 it will stabilize. The SSSG part, which I see a much larger increase, is largely on the basis of me adding more LFS stores, which are yet to get stabilized, which in Q1 we will see a good stabilization in those. Just a follow-up here. So by my calculation, ad spend, if you exclude the other expenses, is up 16%. So if rent is up 13%, the other portion of other expenses will be up even more than 16%. So, I mean, and if it's more variable linked to revenue. See, I think what has also happened is many malls, the electricity cost across states and the maintenance cost and HVAC cost across also malls have gone up over a period of time, and that has also impacted, in some sense, it has impacted the other expenses. Got it. So again, I'll just dwell a little bit on this. So let's just assume SSS growth stays where it is. Where do you see the pre-Ind AS EBITDA margin bottoming out? Is it like currently it's around 17%, and this is a quarter of a high revenue. So where do you see this stabilizing on an annual basis? If, let's say, SSS doesn't pick up. See, I'll tell you on this, Sameer. Now, see, if I take for the nine months, I have shut about 23 or 24 stores. And my write-off on my Pre-Ind AS EBITDA is about close to INR 4 crore. So this has also taken an impact on my EBITDA. So that's why my other expenses are a little higher. See, if I take my closures last year for the nine months, my total amount hit on my Pre-Ind AS was INR 2 crore, 28 lakh. And this time it is INR 4 crore. So that has also resulted in the other expenses as a percentage going up. So on a steady state basis, I think we will target a Pre-Ind AS EBITDA of about between 18% and 20%, with at least being 18% going up to 20%. This 18-20 is with a mid-single-digit SSS, right? We are targeting to do a mid-single SSSG, correct. Now, even if we do a low single digit SSSG, we are very confident that we will be able to achieve the 18%-20% of EBITDA. Got it. Our target is to do a mid-single. But even with a low single SSSG, 18%-20% Pre-Ind AS EBITDA is very much possible without any problem. Got it. And one last question, if I may squeeze, more bookkeeping. So over 30-35 store closures this year, I'm assuming 10-15 will come in the fourth quarter. How many of these would be relocations? No, no. See, relocations happened in the course of business, Sameer. I don't have the exact number of relocations which have happened this year. I don't have it handy. I will give the data to SGA and send it across. I had 23 store closures in this year. These 23 for the nine months are net of relocations. Oh, okay. That answers my question. Got it. Yeah. So 23 is net of relocations. Fair enough. I will come back in the Q4 follow-ups. Thanks. Thanks a lot, Gautam, for answering. Thank you, Sameer. Thank you. Thank you. The next question comes from the line of Gaurav Jogani from JM Financial. Please go ahead. Thank you for taking the question. Gautam, the question here is again with regard to the EBITDA margin. Now, if we look at the average for the nine months, it's around 17.5%. And typically, I have seen that your margins in Q4 dragged because of the lower sales and the operating deleverage at some stage. So taking that into consideration, I mean, it seems difficult to do 16% Pre-Ind AS EBITDA margin this year because your employee cost, again, as you mentioned, has remained elevated to some extent. So what gives you the confidence of taking it to 18% next year, even with a low single digit EBITDA? No, I think, look, I think we should aspire to get 18% from Q1 onwards, Gaurav. I think, look, Q1 is a good quarter, and we also expect demand to pick up a little bit. So I think considering, and plus, we are not also going to have too many store closures next year. So that cost in the Pre-Ind AS also will not be there. So I think we should be able to deliver 18%. See, if I remove my store closures, which I've had, right, for the nine months, I have generated close to INR 117 crore of EBITDA, Pre-Ind AS EBITDA with an 18.2% EBITDA. So currently, without those exceptional expenditure of store closures, it's about 18.2%. Considering next year, I'm not going to have too many closures, and demand also will pick up a little bit, I think we should aspire to do 18% plus EBITDA next year. Sure. So, Gautam, I mean, one of the key reasons here is the gross margins as well. I mean, the gross margins, not taking the subcontracting into consideration, for the nine months has been around good 68%. And as you mentioned, that right now the gross margins are a bit elevated, and we might see some correction. So with these benefits kind of fading out at the gross margins level, I feel that number is doing. See, I think, so Gaurav, I think we should always look at the GM post-subcontracting charges. I think that's the right way of looking at it. So I think, look, 63% is for the nine months, and I think we'll maintain between 62% and 63% moving forward. I don't see a drop in the GM. I don't think it will be to the extent of the 64% what you saw in Q4, sorry, in Q3. But I think that between 62% and 63% will maintain in moving quarters, which earlier, in fact, earlier times used to be at 61%. Now it will be between 62% and 63%. Gautam, just one question on the demand side as well. We are seeing most of the apparel guys getting aggressive, especially the value fashion retailers, in the apparel side, posting with double-digit kind of an SSSG across the board. Now, these players also typically, they tend to sell bottoms, and somebody like Zudio, even they have the bottom wear offerings with them. So do you think there is also some impact from these guys on the overall demand? They might be taking away some share from us. See, I don't think so, honestly. See, our customer comes in for our quality and comfort and our range. And with all due respect, I think the other Value Format retailers also have a good range in tops and bottoms with good quality. So I don't want to say anything negative about that. But our customer comes to our stores because of our range, quality. And I think our impact on revenue is largely to do with the overall demand rather than any competition in value retail, honestly. Sure. And Gautam, my last question is with regards to the LFS addition. I mean, this quarter around here, there were good LFS sales that we had seen. So anything on that? I mean, how do you look this addition? Actually, what happened, Gaurav, is that the stores were under renovation. So one of our large format store partners, about 80-90 stores have actually gone under renovation, and it is temporarily closed. So that is why that number is reflecting lower in our number of LFS stores which we have reported. We have not really shut any LFS stores because, in fact, we've added through Lifestyle, Pantaloons, Shoppers and all. It is just that one of our LFS partners has 80-90 stores going under renovation, and that is why it shows a reduction in that LFS number. Okay. So that would have also some impact on the revenues as well, even though they are not operating this year. Yes, to a certain extent. Not much because it's only 80, 90 stores, and LFS being only 21%-23% of the business, it wouldn't have had a very large impact on revenue. But yes, a small impact would be there. Sure. Thanks. Thank you. The next question comes from the line of Akhil Gulla from Hornbill Capital. Please go ahead. Hi, Gautam. So my question is around the industry landscape and how it is evolving. So if you look at the ASP has increased and the SSSG is zero. So that basically means there is a volume degrowth. So you've been in this industry for over a decade. You understand it very well. So have you seen such a situation before where we had a couple of years of flattish SSSG and volume degrowth? And typically, how long does it take for the cycle to turn around and people to start buying more and the volume to start increasing at low single digits or even double-digit volume growth? So, Akhil, very rightly you asked. I think, look, so a first part of the question on the growth of ASP, right? So our ASP growth is actually on the basis of product mix and not price increase. So till it is based on product mix or ASP growth, the volume degrowth really does not concern me. The volume degrowth would have been a big concern for me if the ASP growth would have come based on price hikes, which is not the case. It's purely based on product mix. So the volume degrowth really does not concern me. It will stabilize in the coming quarters. Now, so for a company like us, this is the first time we are facing this because I think this kind of a similar demand situation was there in 2018, 2019. But at that point of time, we were a much younger company with a weaker base. So even though demand was weak, we still saw double-digit SSSG growth at that point of time because our base was small. Now, after having a decently matured base, I think, and having a tough demand scenario out there, I think this is the first time we as a company are facing this over the last one, one and a half years. But having said that, if I rewind my memory back, I think that 2018, 2019 slowdown in demand also eventually recovered. This one is taking a little longer, but there will be 100% recovery. I'm very positive. Okay. Okay. Understood. And my second question is, I just want to understand a mature-level store economics. So if you take an average mature store which has been in existence for three to five years, typically what kind of revenues? I'm talking about EBO stores. What kind of revenues does it do? What are the gross margins? What is the store-level EBITDA, store-level ROCE that a store which is performing well does? Sure. So see, I think, look, from a mature store perspective, see, an average store does between 19 lakhs to a crore. A mature store would be higher, would be about maybe 1.3-1.4 crores. I'm not having the numbers close to me, but it will be, I think, in the range between 1.3 and 1.5 crores. Gross margin profile would be similar across matured and non-matured. So gross margin would be 68%. So a matured store will deliver a store level EBITDA of about 31%-32% after rent. Okay. Okay. Understood. Yeah. Thank you so much, Gautam, and best of luck. Thank you, Akhil. Thank you, Akhil. Thank you. The next question comes from the line of Ankit Kedia from PhillipCapital. Please go ahead. Gautam, a couple of questions from my side. First is on the product side. While still 40% is coming from leggings, churidars, what are we doing to capture the young audience, say, 18 to 30 age group? Do you see in that segment our growth is a little more muted compared to middle-aged women? So are we seeing some mix change coming in the product where you think that's where some slowdown is happening? See, I think, look, at a mix level, we are doing a lot of work, and the mix is not one of the reasons for the slowdown. Our mix is actually pretty in last few quarters, our mix has evolved very well. In fact, what we are doing, Ankit, is, we as a brand are an all-age brand. We attract the Gen Z. We attract the millennials as well and the older audience as well, so we are more of an all-age brand, so what we have done in recent times also is we have also introduced some core category silhouettes, so some core Gen Z products we are introducing, about four to five products in our product portfolio, and I think that will also start attracting the Gen Z audience into the store. Keeping that four to five Gen Z products, they will also start buying the other products as well. So we understand the importance of Gen Z. See, we don't want to be a Gen Z, Gen Z brand. Like I said, we want to maintain the positioning of a very high-quality all-age brand. But we want those Gen Z to come into the stores and buy because that's also a very large population. So I think once we introduce these products, we do the right visual merchandising around the stores, I think that will make a very big impact. And that actually ties back to the concept of doing a minimum of 400 sq ft, 500 sq ft. See, what was happening earlier on, Ankit, when we were having 150 sq ft, 200 sq ft stores, the display of products was a very big challenge. A lady, when she was walking in, she does not know the different type of trousers which is there because there's no visual merchandising, there's no trousers. Now, by doing a minimum of 500 sq ft, we are creating a lot of trouser space and visual merchandising for our value-added products, including the Gen Z products. So I think once our store size is settled in, I think that also will give a good positive impact on our revenue. Sure. And just to follow up on that is repeat versus new consumers. Are we seeing repeat consumers being intact, or is it the new consumers which are seeing a slowdown? If you can give some data on that. See, I think the largest issue for us is new customer acquisition and slowdown. Our repeat customers who are coming in to buy our Go Colors is very much there. I think when I compared this year's data versus last year and the year before that, I think the largest issue, see, is our drop in bill count is because of the new customer acquisition has dropped down during this tough environment. So I think that is what we are trying to fix right now, that how are we able to get new customers coming in. Sure. My second question is again on the employee cost. I checked the segment on the variability of the employee salary. You have two key components. So in the medium term, say one year out, how is that helping you and what could be the revenue growth? I'm not looking at cost saving. More on the revenue growth, given that it's going to be more variable in nature. How should we read that into SSSG? See, I'll tell you. So this is something which we actually do, Ankit. I'll tell you. So we are creating a variable component, additional variable component over and above what we have for our front-end employees with certain targets on SSSGs and overall growth. If they are achieving their target, there will be an additional variable payout right from the regional manager to the store person. Now, how does that impact my P&L when it is payable only when certain targets are achieved over quarter one, quarter two, or quarter three? If they're achieving those targets, then there is a payout, but employee cost as a percentage will not go up because it has resulted in an increase in revenue. So this new variable component which we are bringing in should go live from Q1, and which will also bring in a big positive impact in our overall revenue. So some bump-up in SSSG could be seen, and this is across all our stores? I don't know, but across what on the blended average level, we will definitely see good positive SSSG based on the variability coming in. Sure. No, I appreciate that. But the variable payout, Ankit, will be only after achievement of that SSSG. So even in a worst-case scenario, if SSSG is not achieved, I don't see my variable employee cost going up because of that. Yeah. So my question was, are we seeing this new structure and employee salary across all our 800-odd stores which we have right now? Yeah, of course. See, it's not a very big structure. There's just a variable component which we are adding, but it will be across all the stores of the country. Sure. Sure. And my last question is on some of the new product launches which we had done, be it denims or be it shorts or be it lingerie, printed pants. How has been that response in the? Doing well. Doing well. But the base is small, so very difficult to judge right now, but definitely good positive response. Denims have actually done well. Understood. Thank you so much, Gautam, and all the best. Thank you so much, Ankit. Thank you. The next question comes from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Hey, hi Gautam. Thanks for the opportunity. Gautam, my first question pertains to your views on demand sentiment. Now, despite initial expectations, and this is for retail at large, for us, very strong quarters supported by consolidated festive season, packed wedding calendar, and then very robust winter, which it turned out to be. The actual performance for broader retail and then for us also has fallen short. So theoretically, all the tailwinds were there in place. So what's your opinion on what's your read on the demand sentiment? Are there any, because you called out that southern part was actually a drag. So are there any nuance-based observations there? A, and B, what would have changed after 15 December where you said that demand has revived? And has that sentiment expanded to Jan as well? So I'll tell you, it's very surprising, but nowadays, the way demand is behaving, so see, the current demand scenario in Q3 was very weak. It's a very tough environment. So there's no shying away from that. It is very tough. But nowadays, particularly on a question, what happened after 15 December, right? Nowadays, we are seeing that shopping during smaller windows or period of time happens in a very, very large way. When festive, there is a very, very big bump-up of sales. So if you take the festive week and the week before that, it will be a 50%-60% increase compared to the preceding weeks. So it's not a gradual build-up to festive. That festive week and the week before that, the sales have a very sharp V-type spike, and then there's a fall. I think the same thing we also saw in December, where most of December was very weak. And when we were heading towards Christmas and New Year, there was another very sharp spike in sales, which recovered the sales of Q3. Honestly, if that spike wouldn't have been there, the numbers would have been very weak. But the way the shopping behavior nowadays is happening, whenever there is a festival, those particular two weeks or three weeks window, there is a very, very sharp spike and not a gradual increase. And that basically answers the question of what happened post-December 15th. Now, how is January? Well, January has been fairly good. January has been actually doing well on a YOY basis. I don't want to jinx it, but hopefully February, March is good. We'll end up with decent numbers for Q4. Sure. And is there any organized or very structured framework in how we measure our market share versus relevant peer group, or is it more anecdotal? Let's say if we would have lost market share, will you figure it out at the end of the quarter or weekly basis or monthly basis? So Tejas, we are actually doing our study with Technopak right now as we speak. We did one during the IPO, and it was long view. So in fact, the study is going right now. And hopefully, by the end of Q4, when we are declaring the Q4 results, the new study on market share, the overall market size, everything will be in place. Perfect. And last one, if I may. Gautam, your whole point on smaller stores earlier sounded very perfect. And if not to judge it by the results, what has happened, the hub-and-spoke model where you will recruit customers from your smaller stores and if they like the merchandise, they can land up in the larger stores was actually sounding very perfect on paper. So did we get the consumer sentiment wrong or the aspiration from the brand misaligned on this moment? No, I'll explain later. So Tejas, that anecdotal example what I had given was for LFS. The consumer gets acquired in an LFS and then comes to EBO. So that thing what I had mentioned of a small store was actually not small store. It was for LFS, like how we enter newer markets through large-format stores. And then eventually, those consumers move and buy also an EBO. Now, why we have taken a certain step for a very small EBO is, if you look, our product range has expanded very well. And see, today in markets where we are having a small store and a medium-sized store, just think of it as a consumer, right? You would want to go to the store which has a slightly larger experience, trial rooms are bigger. So very small stores is very difficult to browse. Having said that, I'm not shutting all my small stores because the small stores from a unit economics perspective still do very well for me. In markets where I don't have a mid-sized store or large-sized store and I'm having a small store, those small stores are doing well. They're growing and they continue to do well. So there's no reason for me to shut every small store. It's just that I have selectively shut those small stores which are coming up for renewal, which also have medium-sized stores in the nearby area as a consolidation perspective. Very clear. Thanks and all the best for coming, Gautam. Thank you, Tejas. Thank you. Thank you. The next question comes from the line of Prerna Jhunjhunwala from Elara Capital. Please go ahead. Thank you for the opportunity. Sir, I had just one question. I just wanted to understand how many stores would be opened in the existing clusters and how many new cities or geographies you are trying to get into in the next one year? See, I think, Prerna, very rightly you asked. We are using a wider approach now rather than just keep growing in clusters. We are going to grow in clusters. That's been our expansion model, but in a controlled way. So I think earlier, it used to be a 50-50 approach. Maybe now it's a 40-60 approach where 40% might come from existing clusters and 50%-65% would come from newer markets. Okay. Understood, sir. Thank you. Thank you very much. All the best. Thank you so much. Thank you. The next question comes from the line of Devanshu Bansal from Emkay Global. Please go ahead. Devanshu, if you can please unmute your line and proceed with your question. Yes. Hi, sorry. Thanks for the follow-up opportunity. I noticed that there has been an increase of six, seven days in the credit days. So this gained significance as receivables are only for 20%-25% of our business, right? So any comments there as in what led to this increase? Yeah, yeah. Sure, sir. So Devanshu, what has happened is because it has been a weak quarter, one of our LFS partners has actually paid us late. That one payment of about a total of about 9-10 crore, which was supposed to come in December, actually came in in January first week. And because of that, our December 31st DSO have gone up a little bit and also impacted our operating cash flow. So there is a working capital increase to the extent of 8-10 crore because of delay in payment from one of our LFS partners, which came in actually in January first week, which was supposed to have actually come in in December. Understood. And last question from my end, Gautam. So you've indicated that certain value-added products have done well, right, in this quarter. But ASP increase is almost like 5%, right? So what would be the contribution of such products in this quarter versus the base if you could just highlight? So I think, look, see, even our value-added products, right, we are not trying to price it very high. We don't want to price it INR 1,200 or INR 1,300. We've always maintained saying that we want to keep our pricing lower than INR 1,000 because we are mass premium, right? We are value premium. So that's why you've not seen a very sharp increase. But the value-added products obviously have played a role. From a split perspective between churidar legging and non-value-added products and not having it right now, I'm guesstimating it will be churidar legging should be between 35 and 40. I don't have the number right now. I'll share it through SGA, but it will be around in that range. The churidar legging would be around 35%-40% of the sales. Okay. Okay, Gautam, maybe I just wanted to understand as in because the gross margin performance is really very good. So I just wanted to understand as in what is actually the impact? Certain products in the trousers category had a slightly higher GM, which has resulted in, but it has had a very small impact on the overall P&L. See, also one of the reasons of GM being a little higher is also the fact that EBO contribution has been higher than LFS contribution. So I think considering all that, I think 63% is the between 62.5% to 63% is the real GM I would be looking at moving forward. So I just wanted to sort of clarify. There is no one-off, right? So all of it is business performance in the gross margin? It's all business performance. There is no one-off at all. Okay. Understood. Thanks for taking my question. Yeah, yeah. No problem, Gautam. Thank you. Thank you. The next question comes from the line of Aradhana Jain from B&K Securities. Please go ahead. Hi. Thank you for taking my question. I have just two questions. One is a follow-up on the previous question on gross margin. How much of the gross margin increase will be because of product mix and how much will be because of the cotton prices benefiting you? I think majorly, it is very difficult to quantify in terms of numbers, but I think majorly it will be cotton prices led. Majorly. The product-led and the EBO-led would be smaller contributions, but it will be majorly driven by cotton prices. Okay. And my second question is on pledge. So again, I wanted to understand that we've been telling that we'll eventually be reducing the pledge, but to the contrary, in quarter three, we've increased our pledge by, I think, 1%. So any thoughts on that? Any sense on by when we expect the pledge to come down? Yeah. Thank you. Thank you for this question. I was going to clarify this. See, we had an urgent requirement within the family, and we had to do this, unfortunately, and this also continues to remain short-term in nature. Now, when will the old pledge and the new pledge get cleared? I will come back soon with timelines, and I'll give it to the market. Right now, I'm not having timelines in my hand, unfortunately. I'm not having them, but the minute I have it, I will come back very soon with some timelines. Sure. Okay. Thanks. Thank you. Thank you. As there are no further questions, I now hand the conference over to the management for their closing comments. I'd like to thank everyone for being part of this call. We hope we've answered all your questions. If you need more information, please feel free to contact Mr. Deven Dhruva from SGA, our investor relations advisor. Thank you so much. Thank you. On behalf of Go Fashion (India) Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.