 "Aditya Birla Group's linen fabric unit eyes Rs. 864 crore revenues in 2016-17")
Besides focusing on increasing its brand outlets this year, Jaya Shree Textiles (JST), part of the $40-billion Aditya Birla Group, is eyeing to grow its linen business by 8-10% in 2016, which will increase its revenue by a minimum to Rs. 864 crore.
During 2015-16, JST expects to churn Rs 800 crore of revenue from its linen business with EBITDA of 11-12%, while another Rs 700 crore will flow in from its woolens product-line.
The company, which imports its linen from Europe and processes it into fabric and apparel under the brand name Linen Club from its plant in Rishra in West Bengal, has recently ventured into the premium apparel space.
Presently, fabrics contribute to 96% of its revenue while the rest comes from its apparel line. It expects, the ratio to remain the same in 2016 as well as it has ventured into
increasing both these lines.
The company, operating under the aegis of Aditya Birla Nuvo — the Group's textile and garment division — has 127 exclusive stores, which will increase to 134 by March 31 this year while another 40 will be added during 2016-17.
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“Apart from increasing our exclusive store count, we are also aggressive on the retail outlets. We have been adding 300-500 stores every year and will continue at this pace", the company's CEO of domestic textiles S. Krishnamoorthy told Business Standard.
Linen Club has presence in over 4,000 retail stores.
It has rolled out the pergola design — a shaded walkway and relaxation area design — in the exclusive outlets to attract higher footfall. All its upcoming exclusive outlets will be based on this design.
Linen Club has also started selling its garments online on the AB Online Fashion portal and is in talks with Snapdeal.
Apart from its focus on the domestic market, the linen fabric maker is also eyeing for expansion into Bangladesh, Sri Lanka and the Middle-East shortly.
"We have opened our presence in Muscat recently and Dubai is definitely in the radar", he said.
Operating in Rs 1,500-crore niche linen market, the company commands a market share of 50% in pure linen textile which is pegged at Rs 900 crore.
However, the brick-and-mortar model will be driving its growth in the near future as fabric — which has a very low online uptake — comprises of the majority of its sales.
To cater to the rising demand in the premium linen garment segment, JST has lined a capital expenditure of Rs 200 crore to double the capacity from its plant in Rishra.
“The present capacity in the plant is 3.2 thousand tonne (tht) which will double to 6.4 tht in 2017", Krishnamoorthy said.
JST is further eyeing for a new plant in West Bengal, Gujarat or Andhra Pradesh which will process its imported linen into fabric and apparel.