Khadim drops athleisure, guides ₹400 cr after a year of store closures
The footwear retailer is shrinking to stabilize, guiding for a 9% revenue rebound while abandoning a key growth bet.
— 2 earlier stories on Khadim India Ltd. →What's new
- Khadim reversed its earlier plan to expand the athleisure category, citing small stores and a lack of changing rooms.
- FY27 revenue guided at ₹400 cr with 14% EBITDA margin after a 12% sales drop in FY26.
- Raw-material costs are up 20-25% since February; management plans price hikes to offset.
Why this matters
The athleisure pullback is a strategic admission: the physical footprint can't support the category. Guiding flat margins on a revenue trough means the recovery depends on cost discipline, not consumer demand.
What we're watching
- Whether price hikes stick without further volume loss.
- If the 14% EBITDA margin holds with lower revenue and higher input costs.
- The pace of store closures versus same-store sales growth.
The full read
Khadim is ₹400 crore revenue, 14% EBITDA margins, and no athleisure. The managing director admitted the chain's stores are too small and lack changing rooms to support the category, a full reversal of earlier plans. This comes after a 12% FY26 revenue drop to ₹367.1 crore as the company cleared discounted stock and shut 60 stores over two years. Profit fell sharply. Raw-material costs are up 20-25% since February, and management says price increases will cover it, keeping margins flat at 14%. The guidance implies a 9% sales rebound from the trough. The strategy is clear: shrink the footprint, fix the balance sheet, and stop chasing categories that don't fit the physical infrastructure. The test is whether price hikes can offset inflation without killing demand.
Questions answered
- Why is Khadim abandoning its athleisure expansion?
- The managing director said stores are too small and lack changing rooms, making athleisure impractical. The company had previously planned to grow this segment but has now reversed that strategy.
- How bad was the FY26 revenue drop?
- Full-year revenue fell 12% to ₹367.1 crore, as the company cleared discounted inventory and closed 60 stores over two years. Profit also declined sharply.
- How will Khadim handle the 20-25% raw-material inflation?
- Management plans to pass on the cost increases through price hikes. They maintained the 14% EBITDA margin guidance for FY27, implying they expect to offset the inflation.
- What is the revenue target for this year?
- Management guided for ₹400 crore in FY27 revenue, which would be a 9% increase over the ₹367.1 crore reported in FY26.
Khadim India Ltd.
Latest quarter · Mar 2026
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All notes on KHADIM →- 26 May 2026 · 5:02 PM IST Khadim drops athleisure, guides ₹400 cr after a year of store closures
- today Khadim India board to mull preferential issue on July 2
- 34d ago Khadim India net profit plunges 84% to ₹31.4M