Gaurik Fashions: India's Biggest Skechers Retailer Eyes the Markets

Gaurik Fashions Limited is the franchise operator running 59 stores for Skechers, Guess, and Bugatti across India. Four of the ten highest-revenue Skechers stores in the country are theirs. ¹ The company has filed a Draft Red Herring Prospectus for an IPO combining a fresh issue of up to 62,00,000 equity shares with an offer for sale of up to 8,00,000 equity shares by Aries Opportunities Fund Limited, a private equity firm exiting its position. ² Revenue grew nearly fourfold between FY23 and FY25. ³ But the business sits on a single franchise renewal risk: the Skechers agreement runs until December 2029, after which the brand has no obligation to continue.

What the company does

Gaurik Fashions operates as a franchise operator — it holds licences from international brands and runs their stores, but owns none of the brand IP and owns none of the real estate. As of March 31, 2026, it had 59 stores: 33 Skechers (30 EBOs and 3 factory outlets), 20 Guess, and 4 Bugatti, plus 2 company-operated (COCO) stores. ⁴

The Skechers franchise is the core of the business. The agreement with Skechers South Asia Private Limited, renewed in 2023 and extended to seven years from January 2023, grants a non-exclusive, non-transferable right to run Skechers stores. ⁵ Non-exclusive means Skechers can appoint other operators or shift to direct-to-consumer at any time; non-transferable means Gaurik cannot sell or sub-license this right. The CRISIL-commissioned report included in the DRHP states that four of the top ten highest-revenue Skechers stores in India (January 2025 to February 2026) are operated by Gaurik. ¹

Guess is operated through Gaurik’s wholly owned subsidiary Gaurik Lifestyle Private Limited. Bugatti is run through Nuvora Retail Private Limited, which in 2025 secured exclusive distribution rights for Bugatti in India. In 2025, Gaurik also added Ray-Ban eyewear distribution (through Luxottica) and exclusive India rights for Sweaty Betty, the premium British activewear brand owned by Wolverine World Wide. ⁶ IPO proceeds will partially fund subsidiary investment for new Guess and Bugatti stores and initial inventory.

Revenue splits: retail stores contributed 81.72% of revenue in the nine months ended December 2025, with the distribution vertical (supplying multi-brand outlets with Shrey sports equipment and other brands) contributing 11.21%. ¹

All stores are on leased premises. ⁷ The risk is layered: Skechers can terminate the franchise (rendering the stores purposeless), and landlords can independently refuse to renew leases.

Industry and market

The Indian retail market was estimated at ₹112 trillion by FY26. ⁸ Within this, the domestic apparel and footwear industry is projected to reach ₹7,300-8,100 billion by FY30, growing at a CAGR of 6.5-8.5% between FY25 and FY30. ⁹ The footwear segment alone is forecast to reach ₹1,900-2,100 billion by FY30. ¹⁰

The filing identifies several growth drivers: rising disposable incomes, increasing e-commerce penetration, the influence of social media on consumer preferences, and a growing working-age population. ¹¹ India’s macroeconomic backdrop supports this: the economy is projected to expand by 6.5% in 2026, and real GDP grew at a CAGR of 7.3% between FY23 and FY26. ¹² The urban population is expected to reach 567.7 million by 2030. ¹³

But the market is intensely competitive. The filing describes a fragmented market with local, national, and multinational players. ¹⁴ Recent entries and expansions have made competition more intense, with price wars in several segments leading to declining margins. ¹⁵ Headwinds include counterfeiting, geopolitical tensions, sustainability pressures, and e-commerce lowering barriers to entry. ¹⁶

The offer and its objects

The IPO has two components. The fresh issue is up to 62,00,000 equity shares of face value ₹10 each; the total amount is redacted in the DRHP as [●]. ² The offer for sale is up to 8,00,000 equity shares by Aries Opportunities Fund Limited, the investor selling shareholder, at a weighted average cost of acquisition of ₹52.45 per share. ² At the peer-implied price range of ₹408-430, Aries is exiting at roughly 7.8-8.2× its entry cost.

The net proceeds from the fresh issue will be used for six purposes: (i) setting up new Skechers stores; ² (ii) investment in Gaurik Lifestyle Private Limited for new Guess stores; (iii) investment in Nuvora Retail Private Limited for new Bugatti stores and inventory; (iv) repayment of certain borrowings of the company; (v) repayment of borrowings of subsidiaries; and (vi) general corporate purposes. ⁶

Debt repayment as an explicit object confirms that leverage is a material part of the capital structure.

Financial performance

Gaurik Fashions has grown rapidly across all reported periods. The table below summarises the key figures from the restated consolidated financial statements, in ₹ crore.

Metric	FY23	FY24	FY25	9M ended Dec 2025
Revenue from operations	57.98	172.01	220.40	202.59
Profit after tax	0.35	3.49	12.26	17.33
EBITDA	12.33	44.40	57.07	52.95
EBITDA margin	21.3%	25.8%	25.9%	26.1%
Operating cash flow	(5.50)	15.93	34.02	11.69

Revenue grew from ₹57.98 crore in FY23 to ₹220.40 crore in FY25 — a 3.8-fold increase in two years, driven by new store openings across Skechers, Guess, and Bugatti. ³ The nine months ended December 2025 show revenue of ₹202.59 crore, which annualises to roughly ₹270 crore, indicating continued momentum.

Profit after tax grew from ₹0.35 crore in FY23 to ₹12.26 crore in FY25, a 35-fold increase. ³ The nine-month figure of ₹17.33 crore already exceeds the full-year FY25 PAT.

The EBITDA-PAT gap deserves explanation. EBITDA of ₹12.33 crore against PAT of ₹0.35 crore in FY23 looks alarming. This is structural: under Ind AS 116 (lease accounting), each store lease creates a right-of-use asset that generates depreciation charges, and a corresponding lease liability that generates interest charges. Both sit between EBITDA and PBT. For a company with 59 leased stores, these two line items consume most of the EBITDA — which is why EBITDA margins are stable at 21-26% while PAT margins improve only slowly. The improvement in PAT margins (0.06% in FY23 to 5.56% in FY25 to 8.56% in 9M Dec 2025) reflects genuine operating leverage as revenue grows against semi-fixed lease costs. ¹⁷

Operating cash flow shows the same progression: negative ₹5.50 crore in FY23 (expansion phase), turning positive in FY24 at ₹15.93 crore and reaching ₹34.02 crore in FY25. ¹⁸ The filing explicitly notes past negative cash flows as a risk factor. ¹⁹

Total assets stood at ₹366.45 crore as at December 31, 2025, against equity of ₹77.62 crore. ²⁰ The ₹288.83 crore gap represents liabilities — note that a substantial portion is Ind AS 116 lease obligations (not traditional financial debt), though the company also carries bank borrowings for which it plans to use IPO proceeds.

A note on share capital: in February 2026, the company issued bonus shares in a 10:1 ratio, increasing the share count tenfold. ²¹ All EPS and NAV figures in the DRHP are retrospectively restated for this bonus issue. The promoters’ weighted average cost of acquisition of ₹73.08 per share is the post-bonus adjusted figure.

Valuation and peers

Metric	FY23	FY24	FY25	9M ended Dec 2025	Weighted Avg (FY23-25)
Basic EPS (₹)	0.25	2.35	7.04	9.13	4.34
Net asset value per share (₹)	3.42	9.99	27.41	41.32	—
Return on net worth	7.61%	37.50%	41.35%	28.15%	34.44%

The DRHP names three peer companies for comparison: Page Industries Limited (the Jockey licensee), Arvind Fashions Limited, and Brand Concepts Limited. The peer P/E range is 57.91× to 61.14×, with an average of 59.52×. The average excludes Arvind Fashions because its P/E is negative (the company is loss-making). ²¹

Applying the peer multiples to Gaurik’s FY25 EPS of ₹7.04 gives an implied price range of approximately ₹408 (at 57.91×) to ₹430 (at 61.14×), with ₹419 at the peer average. These are arithmetic calculations, not price targets — the actual offer price has not been set.

The promoter WACA of ₹73.08 per share implies that at the indicated price range, promoters would see a 5.6-5.9× return on their cost basis. Aries Opportunities Fund, at WACA of ₹52.45, would see 7.8-8.2×. ²²

The Page Industries comp deserves scrutiny: Page manufactures under the Jockey licence and is a vastly larger business (₹4,934.91 crore revenue vs Gaurik’s ₹220 crore). The better comp is Brand Concepts Limited, another licensed-brand retail operator, which had revenue of ₹291.92 crore in FY25.

Promoters and governance

The company has four promoters: Vishnu Pillai (22.73%), Rajesh Dudi (22.73%), Swati Sinha (9.00%), and Isha Dudi (9.00%), collectively holding 63.45% of the pre-offer paid-up capital. ²³ Vishnu Pillai is the Managing Director. ²⁴

The governance section of the filing contains several red flags worth understanding specifically.

Non-cooperating subsidiary auditor. The statutory auditor of Gaurik South Private Limited is not cooperating. ²⁵ This is an unusual and serious disclosure. If an auditor refuses to cooperate, the subsidiary cannot produce a properly audited financial statement. Consolidated statements incorporate subsidiary financials; if those are unreliable, so is the consolidation. The filing discloses this as a risk but does not explain why the auditor is not cooperating.

Promoter relatives refusing SEBI disclosures. Certain immediate relatives — Salil Bindu Sinha, Minoti Sinha, and Soma Sinha — have refused to provide consents, information, or confirmations required under SEBI’s ICDR Regulations. ²⁶ This matters specifically because SEBI ICDR regulations require promoters to certify that their immediate relatives do not have criminal convictions under certain provisions. When relatives refuse to cooperate, the company cannot make that certification. This is a regulatory compliance gap, not merely a disclosure gap.

Regulatory non-compliances. The filing discloses incorrect ROC filings, non-compliances under the Companies Act 2013, delays in payment of statutory dues, and CSR shortfalls that were transferred to the Prime Minister’s National Relief Fund. ²⁷

Related-party transactions. The company has engaged in related-party transactions and the filing states it cannot assure investors that terms were or will be at arm’s length. Outstanding legal proceedings involving the company, directors, and subsidiaries are disclosed. ²⁸

Key risks

Franchise expiry. The Skechers franchise agreement runs for seven years from January 2023, expiring in December 2029. ⁵ Skechers has no obligation to renew. If Skechers decides to operate its India stores directly, or appoints another operator, Gaurik loses its primary revenue source. The agreement is also non-exclusive — Skechers can appoint additional partners in any market at any time. ⁵ The DRHP does not disclose the financial terms or termination conditions of the franchise agreement.

Geographic concentration. Most revenue comes from northern India. ²⁹ Regional downturns, competition, or regulatory changes would disproportionately affect results.

Lease renewal risk. All 59 stores are on leased premises. ⁷ Some lease agreements may not be registered under applicable law, affecting legal enforceability. ³⁰ A franchise termination would compound lease risk: stores built to Skechers’ specifications would become unusable without the brand.

Auditor non-cooperation at a subsidiary. The statutory auditor of Gaurik South Private Limited is not cooperating. ²⁵ The consolidated financials include this subsidiary; if the subsidiary’s numbers cannot be verified, the consolidated statements inherit that uncertainty.

Leverage and Ind AS 116 obligations. Total assets of ₹366.45 crore against equity of ₹77.62 crore at December 31, 2025. ²⁰ A significant portion of liabilities is Ind AS 116 lease obligations — unavoidable for a 59-store operator — but the company also carries financial borrowings that it plans to repay from IPO proceeds. The filing notes that lenders hold charge over the company’s movable properties. ³¹

Footnotes

1. DRHP, page 33 ↩ ↩² ↩³

2. DRHP, page 100 ↩ ↩² ↩³ ↩⁴

3. DRHP, page 235 ↩ ↩² ↩³

4. DRHP, pp.33–34 ↩

5. DRHP, page 38 ↩ ↩² ↩³

6. DRHP, page 101 ↩ ↩²

7. DRHP, page 39 ↩ ↩²

8. DRHP, page 149 ↩

9. DRHP, page 153 ↩

10. DRHP, page 154 ↩

11. DRHP, pp.145–158 ↩

12. DRHP, page 139 ↩

13. DRHP, page 141 ↩

14. DRHP, page 152 ↩

15. DRHP, page 160 ↩

16. DRHP, pp.146–160 ↩

17. DRHP, page 290 ↩

18. DRHP, page 236 ↩

19. DRHP, page 42 ↩

20. DRHP, page 234 ↩ ↩²

21. DRHP, page 123 ↩ ↩²

22. DRHP, page 130 ↩

23. DRHP, page 220 ↩

24. DRHP, page 205 ↩

25. DRHP, page 35 ↩ ↩²

26. DRHP, page 37 ↩

27. DRHP, pp.37–50 ↩

28. DRHP, pp.48–50 ↩

29. DRHP, page 34 ↩

30. DRHP, page 36 ↩

31. DRHP, page 50 ↩