Leading kitchen appliances firm TTK Prestige, a part of the Rs.2,500-crore TTK group, is on the look out to acquire a cookware brand in Europe .
The Rs.1,386-crore company has mandated five merchant bankers to identify the right brand in the cookware segment in Europe for acquisition. TTK Prestige is looking at a deal size of about Rs.400 crore.
“European brands are facing tough times and brands are being sold at lower prices,” said T. T. Jagannathan, Chairman, TTK Prestige, at the launch of 500th store of Prestige Smart Kitchen (PSK).
Two-pronged strategy
The size of the cookware market in Europe is estimated at about 2 billion euro. The proposed acquisition has a two-pronged strategy.
First, the company has created a fresh cookware capacity of 8 million pieces per annum in Gujarat, and huge portion of this capacity will be available for new demand.
Second, the acquisition is expected to fetch significant margin as Europe is served only by brands.
It expects the margin level to improve from 2 per cent to 25 per cent. It now fetches about 5 per cent of total revenues from export market by being an OEM supplier.
On the domestic front, the company is gearing up to double PSK stores in the next three years through penetration into more and more small towns and cities.
This own retail network, which fetches about 18 per cent of company’s revenues, is present in over 260 locations across 23 states.
“By far, this is among the most widely-reached retail chain, and there is no other speciality retail chain which has 500 stores,” said Chandru Kalro, Chief Executive Officer, TTK Prestige.
The company is also looking at stabilising the contribution of imported products to the turnover at 15 per cent in future from 20 per cent now as the company will produce more and more products locally.
