SP Apparels takes majority stake in Crocodile India

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

SP Apparels picked up the 60.14% stake in CPPL from Shivrams Associates (SAPL), also an apparel manufacturer in Coimbatore. S P Apparels stated that internal accruals of Rs 25 crore will be allocated towards the completion of the acquisition and for product and retail
expansion.

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," said P Sundar Rajan, MD, SP Apparels, adding: "we will provide our expertise in manufacturing and they will provide us with an existing network of distributors, wholesalers and retailers."

SP Apparels, which exports to customers like Marks and Spencer, Tesco and Mother care, will utilise 10% of its current manufacturing capacity of 1,50,000 garments per day, for the Crocodile product line. "In the future, we might see a percentage of CIPL's multi-location manufacturing
being outsourced to us in India," Rajan said.

The change of ownership is part of a global effort by Crocodile International (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 a global retail presence of over 1000 stores across Asia.

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, Ang Boon Tian, CEO of CIPL, said.