Well today on 12th July 2017, I visited DLF Mall of India in Noida where I met sales guys from MRVL which was located in Lifestyle. Following are my observations…
#1) One sales guy was working with MRVL since last 5 years and was very much satisfied with the job. He says that starting salary of sales guys in MRVL is Rs 14K compare to others who pays close to 10K per month to their fresher sales guys. Other sales guy who was drawing Rs17K salary has come from Universal Sportsbiz Pvt Ltd (USPL) company which owns Collectabillia, Imara and Wrogn brands endorsed by Virat Kohli. What he says is, when MRVL sees any sales guys working with other brands on the floor and achieving good sales targets, they offer higher salary and hire them. According to these two sales guys, work environment is very good in this company and they get strong support from their peer, at the same time carrier growth is also good hence they don’t even think of leaving the company. In fact, if they cross the sales target like for them next month target was say 18 lacs they will get 1% of it which is 18K incentives which will spread across 2-3 sales guys, hence incentive is quite lucrative. As per them, some part of their salaries are deducted for charity purposes, MRVL pays brand royalties to Salman Khan in the bank account of her sister. May be some part paid to sister and rest paid to Being Human charity.
#2) Sales of that store has seen consistent growth month on month and at present they are clocking around 15 lacs per month sales. Due to GST, new arrival got delayed by 15 days and expected to arrive sooner. One month impact will be felt because of confusion from buyers on GST rates and due to delay in arrival of merchandise.
It seems GST rates are 5% below 1000/- bill & 12% above 1000rs bill, so the sales guys are suggesting to have multiple bills. When I checked the CBEC I found following rates…
a) Articles of apparel and clothing accessories, knitted or crocheted, of sale value not exceeding Rs. 1000 per piece – 5% GST
b) Articles of apparel and clothing accessories, knitted or crocheted, of sale value exceeding Rs. 1000 per piece – 12% GST
so for cloth merchant it might make sense to create multiple bills but same might not be the wayout for retailer shopping at D’Mart.
#3) Regarding Manish Mandhana, these sales guys had a opinion that he is smart, efficient and hard working guy who does regular workout like Salman Khan and he seems to be a childhood friend of Salman. When I asked them about the risk this company carries when it comes to one celebrity who is around 50 years old and might not remain in limelight for longer, in such case what will happen to the company? Their response for this was, well he can remain in the industry for next 10 years and by that time MRVL will reach heights and spread across India.
After almost 30-45 min discussion what I can conclude is, MRVL has got happy employee who gets better salaries and are committed for the company, although products of MRVL like shirts and jeans etc does not look outstanding, it was just like any other brand (until I use it, I will not know the quality & comfort of their products). We as an investor might have lot of concern on the sustainability of this business but these sales guys has seen the growth month on month and they seems to be on the safe hand of MRVL. Initial exposure of say 3% of the portfolio can be taken around 150-160rs wherein Mcap will be around rs 330 Cr.
Further investigation will continue and maximum exposure of 5-6% can be taken at this counter. This story may not attract 10% or more exposure.