PACRA Assign Positive outlook to Entity Ratings of Khaadi Pakistan (SMC-Pvt) Limited
Khaadi Pakistan (SMC-Pvt) Limited (Khaadi or The Company) is a distinct player in the retail fashion industry. With over two decades of history, reflecting growth and expansion, Khaadi has built strong brand equity. It has become synonymous with innovation and quality while ensuring affordability for its target customer base. The basket of the products offered (Ready to Wear (Eastern and Western), Fabrics, Khaadi Khaas, Accessories, Fragrances, Home, and many more). The topline size and growth supplement this assertion. The business model of Khaadi, as envisioned by its founder and CEO, has been the self-propelling force for the expansion of the entity. The retail network has reached half a million square foot physical presence. The brand has outreached outside Pakistan as well. Khaadi designs its outlets to give walk-in customers more than a shopping experience. The Experience Hub launched in December 2021 in Dolmen, Karachi, with a square footage of 32,000 came about not just to create a shopping space, but where experiences can be had while connecting with the product ranges. Khaadi also plans to target the audience of Lahore and Islamabad. The Company will also launch the Hub experience shop in Lahore. Re-branding of the logo is the leverage of distinct plans of the Company which will further unfold in the upcoming years. Recently a IFC invested $ 25mln in Khaadi Corporation. The equity injection will be utilized in expanding the presence and product lines across Pakistan and abroad. The entity has a strong management structure in place, with professionals leading their respective roles. The Company takes pride in its design team which is considered the brain behind the brand. The reported numbers for FY22 reflect the stable position of the Company. Sales mix represents a major contribution in Fabric (FY22: 66% of total revenue (FY21: 67%).
The ratings are dependent on the recovery in the business performance and relative position of the entity. The financial profile is also expected to improve as anticipated. Governance of the Company is expected to take positive support from the initiatives undertaken by the sponsor shareholder.
KhaadiPakistan (SMC Pvt.) Limited (‘Khaadi’ or The Company), was incorporated on July 15, 2015 as a single member company under repealed Companies Ordinance 1984 (now Companies Act, 2017). Previously, the Khaadi which commenced operations in 1998, products were sold by sole proprietorship managed by single menber. The Company is a wholly owned subsidiary of Khaadi Corporation Limited. IFC invested $25 Khaadi Corporation. IFC has been inducted as a minority shareholder up to 20% in Khaadi Corp. The Company has an exceptional retail network, with over 54 stores in Pakistan, and the related party, Texmark (Private) Limited export the products to UAE, Qatar, UK and the Kindom of Bahrain under the brand name of "Khaadi". Apart from the physical stores, Khaadi’s online store is also generating revenues. The Company has a good market share in the retail segment within the country.
Currently, the company has an SMC status where it has a one-member board. In Khaadi Corporation has a five-member on the board, including the CEO, Mr. Shamoon. There are three independent members and one from the IFC. Mr. Shamoon Sultan is the owner and founder of Khaadi. He is the man with the passion and vision to take Khaadi to a level where it competes with the high street fashion brands globally.