Ace Turtle Navigates Rising Costs with Local Sourcing

Amidst rising raw material and logistics expenses exacerbated by the West Asia conflict, apparel retailer ace turtle is intensifying its local sourcing efforts. The company, which manages international brands like Lee, Wrangler, and G-Star in India, is also preparing to relaunch its SaaS business. This platform integrates fulfilment, logistics, hosting, and catalogue management for enterprises, with an expected relaunch from April.

CEO Nitin Chhabra noted that suppliers are already communicating higher costs, and importing goods presents logistical challenges, with one shipment currently held up in the Middle East due to elevated freight rates. To mitigate these impacts, ace turtle is strengthening local manufacturing and sourcing. For G-Star, the goal is to shift from primarily importing merchandise to sourcing 80% of its fall-winter collection locally, compared to 15% for the summer season. Lee and Wrangler products are already 100% locally sourced.

The company is adopting a cautious growth outlook due to geopolitical uncertainties, scaling back expansion plans. Store openings are limited to approximately 12 for the year, with the addition of new brands postponed to next year. Ace turtle's SaaS business, previously a significant revenue generator before the pandemic, is being revived. Chhabra anticipates reaching its former revenue level of $10 million within approximately 18 months, bolstered by AI advancements that accelerate go-to-market speed and simplify onboarding.

Chhabra emphasized agility as crucial for navigating uncertain macroeconomic conditions. The company is currently in a 'wait and watch' mode, closely monitoring geopolitical developments and their potential impact on consumer sentiment. The relaunch of the SaaS business is strategically important, in addition to its revenue potential.