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Ashok Piramal finds Men's Club a good fit |
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July’07
Ashok Piramal Group- ownes Morarjee Textiles Ltd recently acquired 67 percent controlling stake for an undisclosed sum in men’s club, an Italian brand of shirts.
The Rs. 213 crore company is scouting for another acquisition for its front end business in Europe, but has not zeroed in on anything, said Mr. Harshvardhan Piramal Vice-chairman, Morarjee Textiles Ltd. speaking to business line.
“We would prefer to acquire a brand that offers high value added products and fits well within our strategy”, he added
The company hopes to make a dent in Japanese and European markets through this acquisition. It targets a turnover of Rs. 27 crores for the men’s club for the year ending March 2008, he said. Through the manufacturing has been outsourced to a plant in southern Italy, Mr. Piramal said, “we want Men’s Club to maintain relative independence, as we want the brand to retain its authenticity.”
The group has a design centre at Milan and plan to make a foray in the US market within the next two years. The company supplies fabrics and shirts to various international brands such as Flex, Polo Ralph Lauren, Paul Smith domestic one such as Zodiac, Allen Solly and Louis philippe and apparel brands for women such as those of Marks & Spencer and Zara. It will begin supplying trousers next year.
For its second phase expansion, the company is looking to acquire 10-12 acres of land in either Tumkur district of Karnataka or Visakhapatnam. It will entail an investment of Rs. 50-60 crore and the capacity will be doubled to Rs 25 lakh pieces of fabric per annum, said Mr. Piramal.
The company will undertake to invest Rs. 150 crore over the next year in its expansion to build synergies between its fabrics, garment and brand divisions. Funding will come from internal accruals, debt and the 50 remaining warrants of the company’s right issue.
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