Go Colors' operator Go Fashion makes its stock market debut
Go Fashion plans to use the net proceeds from its recent issue to open 120 new exclusive-brand outlets (EBOs) for its brand Go Colors which retails women’s leggings, trousers, and other bottom-wear and currently has 459 EBOs. Go Colors will not, however, receive any proceeds from its offer for sale and the OFS will not form part of its net proceeds, Livemint reported.
The business will also use its net proceeds for working capital requirements as well as general corporate purposes. Go Colors plans to continue its brick-and-mortar expansion into new geographies, expand online, and target customers in Tier 1, 2, and 3 cities.
“Go Fashion is the first company to launch a brand exclusively dedicated to the women’s bottom-wear category,” an analyst at retail broker ICICIdirect told Livemint. “It is a play on the unorganised to the modern retail shift. At the upper end of the price band, it is valued at 9.4 times, 14.6 times EV/sales [enterprise value-to-sales] for FY20, FY21, respectively.”
Go Colors’ unique positioning as a bottom-wear only brand coupled with an increase in disposable income for many women has aided its growth. However, its reliance on a single warehouse for its pan-India distribution and dependance on a single product category could cause problems, according the ICICIdirect.
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