Fashion and textile retailer Raymond Ltd said on Monday it has modified its brand-related policy to address concerns raised by certain investors with regard to the proposed royalty payment by its lifestyle business to the parent company post the demerger.
"The brand ownership of Raymond for all lifestyle-related categories post demerger will be with the demerged new lifestyle company. There will be no inter-company brand licencing rights or royalty contracts," said Chairman and Managing Director Gautam Hari Singhania.
"As an organisation, we are pro-active in addressing the concerns of all our stakeholders. As a routine process, we spoke to our key investors and took cognizance of all the inputs we received from them. I am happy to announce the management's decision of moving brand ownership with usage categories in respective companies," he said in a statement.
Under the proposed scheme, along with the lifestyle business, Raymond and all other brands currently being used in respect of textiles, readymade garments, retail business related to lifestyle business, tailoring services and allied accessories will be assigned to and owned by Raymond lifestyle business.
Consequently, once the proposed scheme is approved by the National Company Law Tribunal, Raymond lifestyle business will not be required to pay any royalty to Raymond Ltd for its use of the brands. Raymond brand ownership for all the other businesses (except for Raymond lifestyle businesses) will remain with Raymond Ltd.
Last month, the company had announced the proposed demerger of its core lifestyle business into a separate entity that will be listed through mirror shareholding structure. Every shareholder will be issued the shares of the new company in the ratio of 1:1.
The move is aimed at a clear demarcation of lifestyle and other businesses leading to the simplification of the group structure. The proposed scheme is subject to various regulatory and statutory approvals.
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Raymond is India's largest integrated worsted suiting manufacturer that offers end-to-end solutions for fabrics and garmenting. It also has business interests in men's accessories, personal grooming and toiletries, prophylactics, engineering and auto components across national and international markets.
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