BANGALORE: The early consolidation moves in India's red hot retail sector is poised to throw up another shakeout. Bangalore-based Primus Group, a value fashion chain that is part of garment export house K Mohan & Co, is in advanced talks to snap up cross-town rival Weekender owned by Gokaldas Images.
Weekender, a casual street wear store chain, has been on the block after Gokaldas decided to stay focused on the booming garment export business in the post-quota regime. The deal could be priced at around Rs 50 crore with the valuation being worked out between 1-1.5 times of Weekender's current topline revenue, sources said.
When contacted, Mr Balaji Bhat, managing director (MD) of Primus, declined to comment. Mr Jagadish Hinduja, MD of Gokaldas Images, also offered no comments. The domestic retail consolidation is gathering momentum with AV Birla acquiring Trinethra, private equity Actis buying Nilgiri's, and Spinach buying Sangam Retail.
Primus could acquire the brand Weekender and a network of 40-50 stores across India. Being one of the early retail brands targeted at the youth and kidswear market, Weekender continues to enjoy reasonable brand recall despite declining visibility in recent times.
Sources said Primus is in the final stages of due diligence and an agreement is likely to be struck shortly. Raymonds and AV Birla too had reportedly looked at Weekender in the past. Sources said the deal would help Primus unlock significant synergies and ramp up its expansion plans.
Weekender owns many of its stores, while others are on long-term lease. Further, Weekender also has long-term supply contracts to some of the big box retail chains.
Primus is positioned as a moderate price store, retailing fashion off-season merchandise of international brands like Levi's, Benetton, Nike and Adidas. It also carries the master franchisee rights for the accessories range of Levi's and Dockers. As part of its expansion plans, Primus recently had raised funds through a private equity placement with UTI Ventures.