QS Fashions move clears Alok Ind's retail plan

By increasing its shareholding in the UK-based value retailer QS Fashions, Alok Industries is making a clear shift towards retailing.

The majority stake in Hamsard, parent firm of QS Fashions, is the second acquisition by Alok in the last few months. In September, Alok had acquired 60 per cent stake in Czech firm Mileta. This gives it access to apparel brands such as Mileta, Erba, Cottonova, Lord Nelson, Wall Street, Osaka and Erbelle.

Susil Dungarwal, a retail analyst said this was a strategic move for the company to move from manufacturing to retailing. "With retailing taking off in India, manufacturers will see a squeeze in margins, so it makes sense to start focussing on retail," he said.

The Rs 1,420 crore company is among the bigger players on the textile scene in India with a presence across categories such as knitted and embroidered fabrics.

Grabal Alok Impex, a joint venture company of the group, had first acquired 26 per cent in Hamsard last year and has now hiked it to 76 per cent at a consideration of £8 million (Rs 69.5 crore). The decision to increase the stake in the company was taken to gain management control of the high street value retail chain, said Dilip Jiwrajka, managing director, Alok Group and director, Grabal Alok.

QS Fashions is owned by Hamsard 2353, a group of private investors who had acquired the company in 2002.

According to Hamsard, the move will provide a strong financial platform for future development and help to fund a multi-million pound refurbishment across the entire portfolio of QS stores.

There are 207 QS stores spread across London, Wales and Scotland and the chain has a turnover of UK Pound 110 million (Rs 955 crore). Jiwrajka said that the company would be launching QS Fashions in India within the next one year.

Grabal Alok Impex, a joint venture between the Mumbai based Alok Industries and Austria's Grabal Group is one of the biggest manufacturers of embroidered fabrics in India.