Anil Ambani has homed in on yet another acquisition. This time, in the garments sector. Reliance Capital, part of the Anil Dhirubhai Ambani Enterprise, is close to picking up a minority stake in the Chennai-based Celebrity Fashions Private. Celebrity Fashions owns the Indian Terrain menswear brand.
V Rajgopal, chairman and managing director of Celebrity Fashions, confirmed the development when contacted by ET. “We have agreed in-principle to sell a stake to the ADAE group, subject to necessary documentation being completed.”
According to sources, Reliance Capital is close to finalising the deal to pick up a stake between 10% and 15% in the company, for a total amount of Rs 15 crore. The agreement is likely to be signed in the next few days. When contacted, a Reliance Capital spokesperson declined to comment on the issue.
The four-year-old Indian Terrain brand, which is growing at 15%, has a turnover of close to Rs 35 crore, and competes directly with brands like Raymond's, ColorPlus and Allen Solly. Indian Terrain is being positioned as a brand for the global Indian. Celebrity Fashions, which has a turnover of around Rs 150 crore, supplies to American and UK brands and retailers like Timberland, JC Penney, Diesel, Banana Republic, Nautica and Marlboro.
Textile exports from India have increased after the phasing out of global textile quotas from January 1, '05.
The company had earlier announced its plans to make Indian Terrain a Rs 100-crore brand by '07 and to enter into the knitwear and womenswear sectors in the near future. It has got nine manufacturing facilities in Chennai. The size of the menswear market is estimated to be around Rs 1,000 crore. Park Avenue, Allen Solly, Peter England and Zodiac are among the leading brands in the menswear category.
A consolidation wave is sweeping the garments industry following the phasing out of textile quotas globally.
Three years ago, Raymond acquired the ColourPlus brand. Recently, the Pantaloon group acquired stakes in the Bangalore-based Indus League. Smaller, younger brands which are looking to grow exponentially and larger players with deep pockets are coming together to acquire a globally competitive scale.