Reliance set to exit textile business, puts Only Vimal brand on the block
Remember the iconic brand, Only Vimal, which became a household name during the 1980s and resonated as a jingle for years? HT reports.business Updated: Jun 22, 2012 21:08 IST
Remember the iconic brand, Only Vimal, which became a household name during the 1980s and resonated as a jingle for years?
Reliance Industries is reported to have hired private investment banking firm NM Rothschild as advisers to sell off its textile business along with the ‘Vimal’ brand.
The brand, which was created by the founder of the undivided Reliance Group, Dhirubhai Ambani, is learned to have been put on the block by Dhirubhai’s elder son Mukesh who owns Reliance Textiles as part of Reliance Industries Ltd (RIL), which has energy and petrochemicals as its main business with interests in retail, telecom, textiles and infrastructure development.
While the company’s spokesperson refused to comment on the reports, sources close to the company justified the move saying the textile business generates a miniscule Rs 2,000 crore of the company’s total turnover of Rs 4,37,331 crore a year.
“There is no relevance of textile business as it is not contributing to the company’s bottomline,” independent analyst SP Tulsian told Hindustan Times. “It is business that was dragged on for years for sentiments and today ‘Only Vimal’ is no more an iconic brand but a ‘tired brand’ that the company should have done away with long time back,” he added.
The pressure on Reliance Industries’s textiles business is also evident from the company's latest annual report which said, the textile industry was impacted due to volatile cotton prices, which reached a peak and then fell steeply.
There were also reports of the workers at the company’s textile division at Naroda going on a day’s strike in February this year over a 60% rise in wages. The company had, however, denied reports of any strike by workers in February.
As many as 6,000 employees work at the Naroda unit of RIL, according to the company’s website. A group of employees have also formed a union under the name of ‘Reliance Employees’ Union’. However, the union is not registered or affiliated to any trade union body.
Reliance Textile’s manufacturing plant is situated at Naroda and as per the market buzz, the sale is expected to be completed by the end of this year.
The textile business was set up by Dhibrubhai Ambani along with a Delhi-based chartered accountant, Amit Mehra.
The brand Vimal became a famous household name and large number of exclusive retail outlets were set up on franchise basis across the country.
First Published: Jun 22, 2012 20:36 IST