SP Apparels buys Crocodile India

Coimbatore-based knitwear maker SP Apparels has acquired over 60 per cent stake in Crocodile Products (CPPL), the Indian arm of Crocodile International (CIPL), for an undisclosed amount.

The Rs 210 crore SP Apparels picked up the 60.14 per cent stake in CPPL from Shivrams Associates, an apparel manufacturer in Coimbatore. S P Apparels stated that internal accruals of Rs 25 crore would be allocated towards the completion of the acquisition.

The change of ownership is part of a global effort by CIPL to rejuvenate Crocodile's brand image through redesigning its product line, and enhancing its retail presence.

CIPL, with revenues of $350 million, currently has over 1,000 stores across Asia.

Crocodile India, currently retailing through 56 franchised outlets, hopes to take that number up to 150 over the next 18 months, as well as establish 30 self-owned stores by 2008.

"We are looking to synergise our strengths. We would provide our expertise in manufacturing and they would provide us with the existing network of distributors, wholesalers and retailers," said P Sundar Rajan, MD, SP Apparels.

SP Apparels, which exports to customers like Marks and Spencer, Tesco and Mother care, would utilise 10 per cent of its current manufacturing capacity of 1,50,000 garments per day, for the Crocodile product line.

"In future, we might see a percentage of CIPL's multi-location manufacturing being outsourced to us in India," said Rajan.

With the newly formed joint venture, Crocodile India projects revenue growth from the current Rs 10 crore to Rs 100 crore by 2010.

An annual budget of Rs 4 crore has been earmarked for advertising. "We see India as potentially our fastest growing market over the next few years'', said Ang Boon Tian, CEO, CIPL.

The Crocodile brand of clothing, often confused with French sportswear major Lacoste, thanks to similar looking logos, has been engaged in an extended legal battle with the latter in India, China and the Middle East over trademark infringement issues despite an earlier out of court settlement and a slight logo change by CIPL.

While Lacoste is an upmarket brand, Crocodile prides itself on quality at mass market prices.