Kanpur-based Mirza Tanners is planning to invite franchisees for selling its Red Tape brand of shoes, and is eyeing 15 shops by the end of 2003-04. The company at present has one shop in Kanpur and two in Delhi.
Kuruvilla Kuriakose, finance director of Mirza Tanners, told Business Standard the expansion would be on a franchise basis and exclusively meant for the Red Tape brand of shoes.
According to company sources, Mirza Tanners' profits slipped to Rs 2.50 crore for the quarter ended December, 2002, as against Rs 3.84 crore during the same period a year earlier, mainly on account of a decline in turnover from Rs 49.23 crore to Rs 38.40 crore during the same period.
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The company suffered because the US and European markets failed to pick up during October-November, 2002.
Though the European market showed signs of revival in December, the US market, which is crucial for the company, continues to be sluggish.
Though the company's turnover decreased to Rs 131.72 crore during April-December, 2002, from Rs 142.11 crore during the same period of 2001, the net profit was higher at Rs 11.21 crore from Rs 8.47 crore a year ago.
The company also prepaid preference shares of Rs 12.50 crore partly by mobilising funds from cheaper sources and the rest through internal funds. However, the company is cautiously optimistic about maintaining its profitability and turnover.