Sapphire Retail Limited ("the Company" or "SRL") is an unlisted, public limited Company, incorporated in June 2014.

Mr. Mian Mohammad Abdullah, the group's chairman, founded the Sapphire Group in 1969. The group's evolution from a yarn manufacturer to one of the largest textile conglomerates reflects his visionary leadership. Over time, the group expanded its footprint into multiple sectors, including power generation, dairy, and retail. In 2014, the Sapphire Group entered the retail industry, with SRL as its retail arm.

SRL is one of Pakistan’s leading fashion retail brands which offers a wide range of products like home, clothing, shoes and accessories, fragrances. The Company owns a wholly-owned subsidiary, Designtex (SMC-Private) Limited (DSPL), which serves as SRL's principal vendor. Its head office is located at 1.5 km, Defence Road, Bhobtian Chowk, Off Raiwind Road, Lahore. The Company currently operates 50 retail outlets nationwide, along with three international stores in UK and the UAE. 

The Company is wholly owned by Sapphire Textile Mills Limited (SAPT), which possesses 100% of its share capital. This complete ownership stake enables SAPT to exercise comprehensive oversight and influence over the Company’s governance framework, as well as the strategic and operational decisions taken by its Board of Directors.

Leadership of the group transitioned to the four sons of Mr. Mian Mohammad Abdullah—Mr. Shahid Abdullah, Mr. Nadeem Abdullah, Mr. Amer Abdullah, and Mr. Yousaf Abdullah—who collectively succeeded him in carrying forward the business legacy. The ownership structure remains stable, and no alterations to this arrangement are expected in the foreseeable future.

The Abdullah family brings nearly five decades of extensive experience in the textile industry. Their deep understanding of textile mill operations, combined with their strong capabilities in strategic planning and policy development, establishes them as highly respected leaders within the sector.

The group maintains a diversified portfolio, operating across industries such as textiles, power, dairy, retail, and investment. Sapphire Group achieves an annual turnover of USD 1.35 billion, with the textile division contributing the largest share of USD 1.15 billion, underscoring its position as the core driver of the group’s business.

SRL has a five-member Board chaired by Mr. Nadeem Abdullah. The Board includes one executive director, the CEO, Mr. Nabeel Abdullah, while the remaining directors are non-executive. Overall, the Board consists of five sponsoring family members. The inclusion of independent oversight will augment the governance framework

The board is led by Mr. Nadeem Abdullah, Chairman and CEO of Sapphire Textile Mills Limited, who brings over 30 years of industry experience and holds a degree from McGill University, Canada. Mr. Yousuf Abdullah, MBA (UK), serves as CEO of Sapphire Finishing Mills Limited and has been an active board member across group companies since 1995. Mr. Amer Abdullah, with an MBA from the USA, has been associated with the group since 1990 and currently holds the position of CEO at Diamond Fabrics Limited and Sapphire Dairies (Private) Limited. Mr. Shayan Abdullah, holding a Bachelor of Science in Business Management from the USA, serves as CEO of Reliance Cotton Spinning Mills Limited.

SRL has no formal board committees. However, all members have demonstrated their commitment and availability to discuss pertinent matters and the overall business strategy. During FY25, the attendance of board members at meetings was satisfactory. The establishment of board committees would further enhance board effectiveness and the overall governance profile of the Company. 

A.F Ferguson and Co. Chartered Accountants, ICAP QCR rated, is the external auditor of the Company and is currently placed in the category “A” on a SBP panel of auditors. The auditor gave an unqualified opinion on the Company’s financial statements for the year ended June 30th, 2025.

The Company’s overall operations are divided into eight broad divisions: (i) Merchandising, (ii) IT, (iii) Internal Audit, (iv) Sales & Marketing, (v) Finance, (vi) Retail, (vii) Purchases, and (viii) HR & Admin. Each division is further categorized into various sub-divisions to ensure a smooth flow of operations.

Mr. Nabeel Abdullah, Chief Executive Officer of the Company, is a graduate of the London School of Economics and brings over 18 years of industry experience. He is supported by a team of highly qualified and seasoned professionals, many of whom have been with the Sapphire Group since 2008. Mr. Ali Saeed, the Company’s Chief Financial Officer, is a qualified Chartered Accountant with 15 years of professional experience.

Although the Company has not established formal management committees, regular meetings are convened on an as-needed basis to address specific issues. The sponsors assume an execution role that depicts an adequate delegation of authority matrix.

The Company has implemented Microsoft Dynamics 365 which provides an integrated and automated approach to managing business processes. This system enables the Company to streamline and consolidate information flow across dispersed operations, facilitating proactive management, minimizing disruptions, and supporting timely decision-making.

The Company’s monthly MIS comprises comprehensive performance reports which are reviewed frequently by senior management. The Company has an in-house internal audit department that reports to the internal audit director of the holding Company.

During MY25, approximately 24.4 million MT of cotton was produced globally, compared to about 24.2 million MT in MY24. Throughout the year, low cotton production was observed in India and Pakistan. However, this was partly offset by increases in cotton production in China, the United States, and Brazil by roughly 9.7%, 19.4%, and 15.7%, respectively. China remains the largest producer and consumer of cotton worldwide (MY21-25). Pakistan's cotton output declined by approximately 30.7%, due to reduced cultivation area and a surge in duty-free imports of cotton and yarn, which disrupted domestic markets. Conversely, cotton imports increased by around 234.0% YoY during the same period to satisfy domestic demand (FY24: roughly 70.0% YoY decline). Cotton arrivals for FY24-25 totaled about 5.5 million bales. The target for cotton production in FY26 is set at approximately 10.2 million bales. The sector's rising dependence on imported cotton poses a supply-side risk. For FY25, imports accounted for approximately 35% of the cotton supply (-11% in FY24), adding about USD 1.27 billion (USD 448 million in FY24) to the country's import bill. Textile exports reached USD 17.9 billion in FY25, a modest rise from USD 16.7 billion the previous year, reflecting a 7.2% year-over-year growth. The largest contribution came from the composite and garments segment, at USD 14 billion, which included the weaving segment at USD 1.8 billion and the spinning segment at USD 0.7 billion. The production of cotton cloth in FY25 declined by approximately 0.7% year over year, reaching around 877.1 million square meters. During FY25, about 25.3% of the cotton cloth produced was exported (compared to roughly 27.2% in FY24), with the rest used for the domestic market. The country's fabric exports fell by approximately 4.4% in FY25 (FY24: up about 5.8% YoY), with approximately 23.4% of Pakistan's cotton cloth exports going to Bangladesh (compared to about 19.9% in FY24), followed by the USA with about 8.1% of cotton cloth exports (compared to approximately 7.8% in FY24). In FY25, the transition from the final tax regime to the normal tax regime is expected to affect the profitability of export-oriented units, with a 29% tax on profits and a super tax of up to 10%. The recent removal of GST exemption (Finance Bill, 2025) on textile inputs for exporters registered under the Export Facilitation Scheme (EFS) will offer tax protection and create a level playing field for domestic cotton and yarn producers. Currently, international cotton prices are higher than the price of locally produced cotton. The gap has widened to approximately 9.8 cents per pound (as of July 18, 2025), resulting in an average increase of about USD 36.8 per bale of imported cotton. A greater reliance on imported cotton could lead to higher raw material costs, ultimately impacting yarn prices and profit margins for the sector. Conversely, energy and finance costs are expected to stay within a range, given the projected reduction in interest rates and the absence of any major energy tariff increases. Considering the current climate change, flooding in major cotton regions, and shifting crop patterns, the target of approximately 10.2 million bales for FY26 appears challenging.

The retail market is highly fragmented and dominated by the unorganized segment. Within the organized segment, SRL holds a competitive and robust position relative to its peers. Key competitors in this segment include prominent brands such as Ideas, Khaadi, Outfitters, J., and Bareeze

The company achieved a notable increase in total revenue, rising from PKR 32.7bln in FY24 to PKR 41.7bln in FY25. This robust performance was overwhelmingly dependent on local sales, which contributed 97.5% of the total revenue, with the remaining balance derived from export sales. Overall, the company achieved a robust 26.37% growth in total goods revenue, driven by exceptional performance in Accessories (51.08%) and solid growth in Clothing Items (25.58%), which confirmed its position as the core revenue driver. This strong performance was partially offset by a significant 23.40% decline in the smaller Home segment

During FY25, the company experienced a contraction in gross margins, which fell to 24.0% (FY24: 28.9%), primarily due to higher raw material costs. On the financing front, financial charges eased slightly to PKR 1,197 million (FY24: PKR 1,233 million), reflecting improved cost management. Despite margin pressures, the company’s bottom-line profitability improved to PKR 1,500 million (FY24: PKR 1,348 million), supported by a reduction in the finance cost-to-sales ratio. However, the net margin narrowed to 3.6% (FY24: 4.1%), highlighting the ongoing impact of elevated input costs on overall profitability.

To strengthen its digital presence, SRL has successfully implemented Salesforce to strengthen its retail operations and enhance customer engagement, resulting in a more unified view of shoppers across all channels. Management remains committed to accelerating growth and plans to expand its physical footprint by opening new retail outlets while revamping existing stores to further elevate the customer experience. 

The Company's working capital efficiency improved during FY25. Net working capital days increased to 64 days (FY24: 59 days), driven by an increase in inventory days (FY25: 69days, FY24: 59days) The Company's short-term trade leverage ratio was reported at 80.2% during FY25. The Company's trade assets clocked at PKR 10,260mln (FY24: PKR 8.389mln). Marking a significant step in its global expansion, the Company has opened its first retail outlet in the UAE, raising its international retail network to three locations. 

During FY25, SRL's cashflows (FCFO) increased (FY25: PKR 4,514mln, FY24: PKR 3,809mln) owing to the increased EBIDTA. Consequently, interest coverage increased (FY25: 5.1x, FY24: 3.9x) Similarly, the debt coverage reflected an inward trend and was recorded at 2.5x (FY24: 2.1x). 

The Company maintained a moderately leveraged capital structure with leveraging stood at 38.6% in FY25 ( FY24: 33.2%). Long-term debt increased to PKR 1.46bln (FY24: PKR 1.35bln). The equity base grew to PKR 5.9bln as of FY25 (FY24: PKR 4.4bln) mainly supplemented by unappropriated profits of PKR 3.9bln