Zodiac Clothing Co, manufacturers of the owners Zodiac brand menswear, as part of its restructuring, plans to merge with its subsidiary Mayfair Ltd. While Zodiac Clothing focuses on the export business, Mayfair caters entirely to the domestic market.
"We have two separate companies catering to two different markets. But to create transparency and exploit synergies, we would like to merge into one company," Anees Noorani, managing director of Zodiac Clothing said.
The merger could take place by the next year depending upon the rationalisation of the tax structure relating to stamp duties, he added.
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Currently, the equity capital of Zodiac Clothing is Rs 3.39 crore at a face value of Rs 10, while that of Mayfair stands at Rs 7.99 crore at a face value of Rs 100 each. Zodiac Clothing notched up a turnover of Rs 65.04 crore for 1998-99, while the subsidiary clocked gross revenues of Rs 33.58 crore in the same period.
Zodiac is one of the leading players in branded menswear and manufactures shirts and ties in the premium category. In recent years, the company has faced stiff competition from rivals like Arvind Mills, Madura Garments, Raymond and Bombay Dyeing which have come out with a multi-brand strategy.
Zodiac currently has 75 exclusive shops in the country, but bulk of the sales come from the 2,000 odd multi-brand outlets. The company has entered into an alliance with Rediff.com for selling its brands online.
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Zodiac Clothing, as part of its expansion, also plans foray into branded women's wear. The woman's western wear market is still nascent and has yet to pick up.
The Aditya Birla group's Madura Garments is another company which is eyeing this new market. It plans to launch the women's western wear through its Allen Solly brand.
Apart from their premium brand of readymade clothes of shirts and ties, Zodiac has introduced Zod range of casual clothing in the upper medium segment. Anees Noorani, managing director of Zodiac Clothing, admits that Zod is a late entry in the market but said the market was buoyant enough to be competitive to the rival brands like ColorPlus, Free Look and Indigo Nation. The current market size of casual clothing is estimated at around Rs 185 crore and is expected to grow at 40 per cent annually.
He , however, did not disclose the sales and the marketshare figures it was targeting in the casual segment. Zodiac currently enjoys 30 per cent share in the premium segment.