S Kumars plans to hive off retail division

Textile and apparel major S Kumars Nationwide (SKNL) is ready to ride the retail bandwagon.

The company has lined up exclusive outlets, international brands and expansion of production capacities for exports.

To start with, the company is planning to demerge the retail business and make it a strategic business unit (SBU). It is also planning to list it as a separate entity in three to four months.

As a precursor, SKNL acquired the retail business of its subsidiary Brandhouse Retails for Rs 12.95 crore on Thursday."We will discuss the proposal of demerger in the board meeting on January 12," said Nitin S Kasliwal, managing director and vice chairman, SKNL.

Kasliwal said the company was planning to bring many international brands to India in the next couple of years. Of the four international brands planned for this year, two will be launched by September.

On expansion plans, he said the company wants to set up 1,000 exclusive outlets for its umbrella brands in the next three years from the current 90-odd stores across the country.

Recently, the company had entered into an exclusive lincesee arrangement with UK-based Austin Reed Group to introduce Stephens Brother, a formal wear brand in the super premium segment.

Stephens Brother will be introduced in March 2007, which will be sold through its exclusive branded outlets. Tarun Joshi, CEO, Brand HouseRetail said: "In the first year, the company plans to open 10 stores. We plan to increase it to 50 by the fifth year."

SKNL is also planning to set up outlets for two new international brands - Escada and Dunhill, for which it has exclusive manufacturing and retailing rights.

The company also has huge plans for exports. To scale up exports, the company will invest Rs 15 crore to add capacities. "In the first year, we expect a turnover of Rs 50 crore from exports to European and US markets," said Govind Mirchandani, executive director, S Kumars Nationwide.

S KNL had acquired a manufacturing unit for shirts and trousers in Bangalore, while construction of a new plant for production of suits is underway.

The company has a capacity of 2000 shirts, 1500 trousers and 500 suits per day to cater to exports demands..

"We want to focus on fashion and accessary retailing. We will mostly deal with luxury, high-end super brands in the country," Joshy said.

In fact, SKNL had set up Brandhouse Retails (BHL), a 100 per cent subsidiary, in January 2006, to make a foray into organised retailing. It had earmarked an investment of close to Rs 90 crore over the next two years for this new business.