It was named after Dhirubhai Ambani’s nephew, but after draping India for over three decades, Reliance Industries may finally sell ‘Vimal’.
According to independent sources, Reliance Industries (RIL) has mandated investment bank NM Rothschild to approach strategic partners for a possible joint venture or even a complete sale of its ailing textiles business, including Vimal, once valued at a little over Rs 300 crore.
The RIL spokesperson, when contacted, did not want to comment on speculation.
Started in 1966 from Naroda, Reliance’s diversification into textiles was strategic at that point, but now the business has lost much of its sheen and is no longer a priority. Currently, the business contributes less than 2.5 per cent of RIL’s total turnover of Rs 85,000 crore.
Losses at RIL’s textile division accentuated due to labour unrest and volatile cotton prices. A few months back, a majority of the textile division’s 6,000 employees at its Naroda plant went on strike, demanding a 60 per cent rise in wages. The plant manufactures about 20 million metres of fabric under the Vimal brand.
Sources say feelers have also been sent to funds specialising in distress assets. Players like Wilbur Ross are already present in India and have similar textile companies, like OCM, in their portfolio. Synergising the two will scale up operations and improve brand visibility. However, the valuations could not be independently verified.
The Vimal brand ,which began with sarees in the 70s, graduated to men’s suiting in the 80s and home furnishings under the Harmony brand name and went for a major revamp in 2007.
Though Vimal, earlier branded Only Vimal, reached iconic proportions in the 1980s and early 90s, it has lost its charm as investments were not made to prop it up or change its character with time. It has increasingly lost out in the crowded branded apparel space, where the Aditya Birla Group and Raymond have gained significant market share with marquee brands such as Allen Solly, Van Heusen, Color Plus and Park Avenue.
“Though the brand was there for 10-15 years, RIL hardly invested in its branding and marketing. They just hung around with old products,” said Harminder Sahni, managing director of Wazir Advisors, a retail consultant.