Madura Garments lines up two-way split
By Boby Kurian & Preiti Sharma Shahane, TNN |
Highlights
BANGALORE: AV Birla Group (AVB) is set to split Madura Garments, the country���s largest branded apparel business, into two separate companies. AVB would carve out separate entities for lifestyle and mass brands out of the unlisted company.
The group is poised to unveil MG Lifestyle Brands & Retail Business ��� a new fashion brands company operating with key brands like Louis Philippe, Allen Solly and Van Heusen ��� besides lifestyle retail formats such as Planet Fashion and Trouser Town.
It is learnt that SF Jeans, which marked Madura���s denim foray, and the international licensed brand Esprit will also be part of this new entity. The other company, MG Popular Brands & Retail Business, would operate in the mid-priced-to-mass category with brands like Peter England. Both the new entities will be divisions of AV Birla Nuvo.
However, unconfirmed reports suggest that AVB would look at the possibility of taking the lifestyle brands company public in the future. ���The move is aimed at putting in place strategies for our growth in the next 5-10 years. This will help us in focused brand building and to be on road for profitable aggressive growth,��� AV Birla Nuvo director Vikram Rao told ET.
He said the 400-odd staff of the existing company would be re-aligned in line with the re-structuring. Madura Garments president Hemachandra Javeri will become senior executive president reporting into Vikram Rao overseeing the fashion brands company even as Ashish Dixit, who is currently with group chairman Kumarmanglam Birla���s office, will move is as president of the same company.
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MG Popular Brands & Retail Business will have a separate president who will also report to Mr Rao. Madura Garments is expected to report revenue of round Rs 600-650 crore in FY���07, and is currently a clear leader in the domestic apparel space with annualised growth of 20% in recent years. AVB acquired Madura Garments from UK���s Coats for Rs 236 crore in 1999. The fashion brands company, which will also include Allen Solly Womenswear and Van Heusen Womenswear, is likely to report a topline of Rs 450-480 crore, while the standalone Peter England is likely to show up with Rs 180 crore turnover in FY���07. It must be mentioned that Peter England selling over 3 lakh pieces every month, is arguably the largest selling menswear brand in the country.
Besides accelerating the overall growth of the branded apparel business, sources said the latest move is also in sync with the market dynamics and AVB���s own retailing plans. For instance, Peter England could play a critical role in AVB���s proposed hyper market retail venture. A separate company for the mass brands assumes significance in this context.
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