New Stores, Strong Margins, Loyal Customers: Why IMAGE Pakistan Is on the Investor Radar?

Image Pakistan Ltd. (IMAGE) is stitching together a strong growth narrative in the retail fashion space, underpinned by strategic investments, rising demand, and a deeply loyal customer base. In its recent corporate briefing hosted by Topline Securities, IMAGE’s management laid out a focused vision for the future—and it’s one that investors and fashion market watchers should take note of.

Investing in growth: new machines and store expansion

During 9MFY25, IMAGE incurred Rs193 million in capital expenditures, and plans are in place to spend an additional Rs250 million on multi-head embroidery machines and Rs150 million on store expansions over the next nine months.

The embroidery segment is already at 100% utilization, prompting the company to outsource production to meet current demand. The arrival of 20 new multi-head embroidery machines is set to ease this bottleneck, meet in-house demand, and expand production capacity to support future growth.

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Financing is being managed smartly. The machinery import bill will be covered through fixed asset financing from banks, while other associated costs and capacity-related investments will be handled internally.

Physical retail footprint is growing

IMAGE is actively expanding its retail footprint. The company currently operates 14 stores, with four more outlets in the pipeline—three new stores and one expansion. Notable upcoming locations include:

• Expanded Zamzama flagship store (Karachi)
• Bukhari Commercial (Karachi)
• F-6 Markaz (Islamabad)
• Giga Mall (Rawalpindi)

With these additions, IMAGE is expected to operate 17 physical stores by the end of CY25, complementing a strong global online presence.

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Online and offline sales momentum

In 9MFY25, e-commerce contributed 24% of total sales (Rs788 million), while physical retail accounted for 76% (Rs2,542 million). This split highlights IMAGE’s omnichannel strength, which allows the brand to serve a broader, digitally connected customer base while leveraging brick-and-mortar reach.

Gross margins and sales outlook

Gross margins saw a seasonal dip from 55% in 2QFY25 to 45% in 3QFY25, attributed to a mix of product lines and quarter-specific costs. However, with the Spring/Summer season and Eid falling in 4Q, the company anticipates a strong recovery in revenue and margins by year-end.

Looking ahead, IMAGE expects to achieve Rs4.5 billion in sales in FY25, closing in on its Rs5 billion target, and is eyeing 25% year-over-year growth in FY26.

Customer loyalty and operational efficiency

A standout metric from the briefing is IMAGE’s 90% customer return rate—a rare achievement in retail that reflects deep brand trust and strong product-market fit.

On the tax front, IMAGE benefits from a favorable structure:

• Image Tech is tax-exempt, reducing the group’s consolidated effective tax rate
• Accelerated depreciation and Section 65B exemptions have further supported margins in previous years

Diversification into perfumes

While perfume production is still in early development due to high capital requirements, management remains optimistic. Leveraging its brand equity and loyal customer base, IMAGE sees this as a long-term opportunity that could complement its core apparel line in the years to come.

Conclusion: a tailored strategy for sustainable growth

From aggressive store expansion and equipment upgrades to a robust online channel and high customer retention, IMAGE is positioning itself as a growth-centric brand with a focus on execution. With a near-term sales target of Rs4.5 billion and strategic plans in place, IMAGE appears well-equipped to scale while maintaining its premium appeal.

Source: Topline Securities (Private) Limited

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →