Royal Classic plans brand acquisitions

Tirupur-based Rs 225 crore integrated textiles and apparel company, Royal Classic Group, is considering the acquisition of at least two major brands by April 2007.

The move is in line with the company's vision to double its turnover to Rs 500 crore, before entering the capital markets after 2008.

Apart from enhancing exports and expanding its retail network, company executives said that acquisition of brands is high on the agenda. The company had recently acquired the innerwear brand, Smash.

R Sivaram, executive director, Royal Classic Group, told Business Standard that the company is in talks with a couple of renowned apparel brands for acquisition.

"There are many family-owned companies, which despite a good performance have not been able to grow beyond Rs 20 crore. We are targeting such brands and negotiations are on since the last six months. We may complete one acquisition by March 2007," he added.

"Our IPO plans have been postponed till 2008 as we want to increase our business size to Rs 500 crore apart from making our presence felt strongly in the consumer market," said Sivaram.

The company has targeted Rs 250 crore revenue in 2006-07. "We will cross the Rs 100 crore mark in exports this fiscal. We are planning exports worth Rs 125 crore. Revenues expected from Classic Polo and Smash are Rs 35 crore and Rs 10 crore, respectively," he pointed out.

Royal Classic Group also supplies garments to clients such as Gap, Fila, Kitaro, Kohl's and Daniel Hechter in the US and Europe.

"This year, we are expecting a significant jump in exports as major brands are moving their sourcing towards India from Pakistan and Bangladesh due to various reasons such as security and natural calamities," he contended.

To enhance retail sales, the company is planning to open 60 exclusive brand outlets all over the country by March 2007. By the end of 2007, it will go up to 100.

Besides, its products are available through 1,200 multi-brand outlets. He claimed that Classic Polo is the first apparel brand in India to have a back up of 100 per cent vertically integrated infrastructure from cotton growing to retail selling.