The Hindu : Business : Celebrity Fashions eyeing production base abroad

Online edition of India's National Newspaper
Thursday, Jul 03, 2008
ePaper | Mobile/PDA Version

Business

Business

Celebrity Fashions eyeing production base abroad

Special Correspondent

To take advantage in the competitive garment business

CHENNAI: Celebrity Fashions, a Chennai-based garment exporter, has kick-started a serious search for an overseas production base. It has formed a `search team’ within to explore production option either in Vietnam or Bangladesh. The team has already opened up talks with local garment manufacturers in these countries for a joint production base. It is felt that a production base in any one of these two countries will bring in huge cost advantage for the company in the highly competitive garment business.

V. Rajgopal, Chairman and Managing Director, said Celebrity was ideally looking at partnering a local maker with around 500 machines. The joint venture would be used to make design-specific garments for the clients of Celebrity. Mr. Rajgopal said that Indian units could not match Vietnam in cost.

Private equity

He said a Singapore-based fund was keen to invest in its domestic retail player, Indian Terrain (currently a division of Celebrity). Celebrity incurred a total loss of Rs. 19 crore in the last financial year. This was caused primarily by rupee appreciation and cost inefficiency of its trouser plant at the Madras Export Processing Zone (acquired early last year for Rs. 85 crore).

Celebrity had on hand $12 million worth of fresh business and the impact of this on the company would be felt from the fourth quarter of this financial year, Mr. Rajgopal said. He said the domestic business was showing robustness with the launch of women’s wear in Indian Terrain. In this context, he did not rule out the possibility of Celebrity hiving off Indian Terrain into an independent company and listing it subsequently if the Singapore-based private equity fund offered a good premium. “We will look at a minimum investment of Rs. 100 crore,” he said. Mr. Rajgopal was confident that the company would scale a turnover of Rs. 345 crore this financial year.

Printer friendly page
Send this article to Friends by E-Mail

Business