Pantaloon may take 26% in Kamadgiri Synthetics
Pantaloon is set to pick up a strategic stake in the Mumbai-based firm with the intention of building up a strong pipeline of apparel product supplies, reports Indulal PM.business Updated: Jul 31, 2007 02:37 IST
Kishore Biyani's Future Group, promoters of retail major Pantaloon Retail (India) that runs the Big Bazaar chain, is set to pick up a strategic stake in the Mumbai-based apparel-maker Kamadgiri Synthetics with the intention of building up a strong pipeline of apparel product supplies forming part of an aggressive retail strategy.
The Future Group is selling its two textile manufacturing units to Kamadgiri Synthetics as part of an exit strategy. Under the plan, Future group will buy a 26 per cent equity holding in Kamadgiri, industry sources said.
The sources said top officials of both the companies are working on the exact shareholding pattern which will be finalised with in a month or two. However, Future Group's managing director Kishore Biyani denied the deal. "We are not doing any transaction like this," he said.
Stripes Apparels, a Future group company, with a capacity to make about one lakh pieces a month, has merged with Kamadgiri. An unlisted Kamadgiri group company, Innovative Fabrics, has already been merged with Stripe Apparels. The Future group has another two garment factories, which will be bought out by Kamadgiri at a later date, the sources said.
"After the merger, Kamadgiri will have a production capacity of more than three lakh garment pieces per month. Currently, these garment factories are supplying garments mainly to Pantaloon Retail and also doing some business for Raymond as well," said sources close to Kamadgiri. Kamadgiri officials declined to comment on the issue.
Promoted by Pradeep Kumar Goenka, the Mumbai-based textile firm has its plant in Umergaon with production capacity of nearly six lakh meters. The company also owns the 'True Value' brand.
Kamadgiri is also opening retail showrooms under the brand name 'Bangkok Fashion'. It may also open shops inside Pantaloon’s stores. It is learnt that three retail showrooms should be operational by August. Company plans to open up to 100 retail showrooms all over India over the next two years.
"This will be a store-in-store concept," the sources said.
The Future Group is one among the top players in India's retail space. Headquartered in Mumbai, the company operates over 5 million square feet of retail space, has over 450 stores across 40 cities in India and employs over 18,000 people.