PACRA Maintains the Entity Ratings of Khaadi Pakistan (SMC-Pvt) Limited

Khaadi 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 and 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 in a way to gives more than a shopping experience to walk-in customers. Recently done re-branding of logo is envisioned to leverage distinct plans of the Company which will further unfold in the upcoming year. A foreign investor is in the final stages of their evaluation and the proposed 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 COVID-19 has created many challenges and opportunities for the retail industry. One of the biggest opportunity available to the industry includes the untapped market for retail fashion which needs to be explored further by developing the retail footprint and eCommerce channel. The reported number for the recent period reflects the stable position of the Company. Adequate profitability was booked in 1QFY22. While debt metrics accordingly depict a weak position, they are expected to improve post-equity injection and recovery in the business.
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.

About the Entity
Khaadi is a multinational Pakistani retail fashion brand. It started operations in 1998 by offering kurtas and loose fabric made from the hand-woven fabric of both eastern and western touch. Khaadi has now an exceptional retail network with 60 stores in Pakistan, 14 in UK, UAE, Qatar, and Bahrain. 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. The Company has laid its foundation on the back of brand strength, retail market, fashion design, marketing, supply chain, strategy, and finance.
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. Khaadi has grown under his leadership. A team of professionals assists him.