Himatsingka buys Italy brand for Rs 116 crore

Bangalore-based silk fabric manufacturer Himatsingka Seide has acquired 70 per cent stake in Bellora, an Italian bed linen brand for Rs 116 crore. The acquisition will enable the company to spread its presence globally. Himatsingka is also in talks with other international bed linen brands.

The acquisition of Bellora, a pan-European luxury brand, is in line with Himatsingka's strategy to acquire high-end distribution networks in the global home textile segment.

Rajesh Kunnath, chief financial officer, Himatsingka Seide, told Business Standard, "The valuation of the acquisition is ¤20 million (Rs 116 crore). The equity value of the transaction is 13 million euros (Rs 75.4 crore) and Bellora has a debt of 7 million euros (Rs 40.6 crore)."

Established in 1883, Bellora has presence across leading European department stores along with brand stores.

Himatsingka Seide plans to capture the value market taken by the retailers by opening Bellora stores in the US and European markets. Currently Bellora is retailed through 17 owned stores and 350 retail points.

"The main thrust of the company would be to expand Bellora in the US and European markets as we feel it has not utilised the full potential as a retail brand," said Kunnath.

In June 2006, Bellora closed down its own manufacturing facility for restructuring initiative. Henceforth the sourcing for the brand will be undertaken from Himatsingka's production facility at Hasan, Karnataka, which has a manufacturing capacity of 200 million metres.

Continuing its acquisition strategy, Himatsingka is in talks with other bed linen brands in the US and UK, which are expected to be completed in a couple of months. In India, Himatsingka has launched Atmosphere, a luxury home furnishing brand, which registered sales of about Rs 25 crore in this financial year.

Over the next six months the company would be opening about 4 more Atmosphere stores in India. It would be launching the brand's first overseas store at Dubai, followed by stores in Hong Kong, Kuala Lumpur and Singapore. During the quarter ended December 2006, Himatsingka Seide registered total income of Rs 53 crore with a net profit of Rs 15 crore.