Chennai: With Covid forever changing travel, bag and travel accessory retailer Witco has decided to quit smoking, pulling the shutters on 70 years of retail.
Covid-induced travel restrictions have crippled travel business with airlines, baggage retailers and the hospitality industry under losses. “We had reported 20% year-over-year growth until demonetization in 2016. Since then we’ve only seen negative growth and this year has been a blow. We don’t expect companies to come back to buy back even if the lockdown is lifted, especially after large corporations cut costs on business travel and the concept of working from home is the accepted new normal. And the imposition of the Goods and Services Tax has also created chaos, ”said co-owner Vice President Harris. Witco was founded in 1951 by founder MPC Mohamed and was taken over by his sons – VP Nurdeen and VP Harris – after his demise. Witco announced the closure of 11 stores in Chennai, Trichy and Kozhikode. It had 30 employees.
Driven by 70% of its business on premium travel luggage, it said there was no hope “at the end of the tunnel as several countries have imposed travel restrictions.” School bags, office bags and accessories represent the remaining 30% of the activity. “Unlike other retailers, we pay for new rentals that are updated to market standards. After the first foreclosure we got a 50% rent waiver from a few landlords, but we can’t expect the same again. We’ve tried to embrace e-commerce as well, but we haven’t been successful because customers always prefer to physically check baggage before placing an order, ”said Harris.
“We are happy to report that we owe no debt to anyone. We settled all employees with their tip payment, which went well with our adherence to the LIC tip policy. Even among our suppliers, we had asked them to resume their last supplies, which went without any problem, ”said Harris.
C Venkat Subramanyam, Founder and Director of Veda Corporate Advisors, Investment Bankers, said: “Witco is a well-respected brand. However, regional specialty retailers like them face challenges of scale. They have to compete with multiple players, both online and offline. With the opening and expansion of their franchised stores by major luggage brands, this has become difficult for specialty retailers. Between 2005 and 2010, there was a great availability of capital for their expansion, however, many retailers missed this opportunity and are now facing difficulties. “