Raymond Buys Portuguese Garment Firm

Textile major Raymond has acquired Regency Texteis Portuguesa Limitada, a Portugal-based garment company, for $3 million. Regency's product line includes suits, jackets, trousers and waistcoats.

Gautam Hari Singhania, chairman and managing director of Raymond, said: "Raymond has been looking at expanding its presence in Europe and other developed markets. The current acquisition provides Raymond with a manufacturing and distribution base in Europe."

"Regency is a privately held company and the owners of the company have decided not to continue in the textile business," Singhania said.

The Singhanias are planning to leverage this acquisition and promote the Raymond brand in Europe. Elaborating the brand promotion plan, Singhania added, "We will built and promote the Raymond brand in Europe."

 

"Through this acquisition, the company will be in a position to supply garments converted out of its fabrics under its own brand. Raymond will be able to utilise the European company to introduce its latest European styles in the domestic market also," he said.

Pradeep Bhandari, president, finance, Raymond, said, "Raymond intends to change the name of the acquired company."

Regency has only one factory with a manufacturing capacity of 400 jackets and 400 trousers per day. Over 90 per cent of its production is exported to various European countries such as the UK, Ireland, France and Switzerland.

The Singhanias will be expanding the retail distribution network of Regency. The Portuguese company currently has two shops in Portugal and two in Spain through its subsidiary firm.

"Portugal offers a highly competitive cost structure in western Europe for garment manufacturing with wage levels significantly lower than the UK, France, Italy and West Germany," Bhandari added.

Regency's turnover stood at $5.2 million for 2000 and it earned a profit before interest, depreciation and tax of $5,91,000.

Posts Rs 40 crore profit in Q2

Raymond Ltd has reported a net profit of Rs 40.83 crore for the second quarter ended September 30, 2001, compared with a net loss of Rs 151.70 crore in the same period in the previous fiscal.

The company's turnover decreased from Rs 444.40 crore to Rs 294.99 crore, while other income was higher at Rs 6.55 crore (Rs 5.23 crore). Interest in the reporting quarter was lower at Rs 4.17 crore (Rs 30.14 crore), while depreciation stood at Rs 12.99 crore.

For the first half year ended September 2001, the company has reported a net profit of Rs 36.19 crore (a net loss of Rs 187.87 crore). Net sales stood at Rs 427.13 crore (Rs 771.23 crore).

Gautam Hari Singhania, chairman and managing director of Raymond, said, "Sales of the textiles division, which contributes substantially to the company's total sales and profitability are of seasonal nature and bulk of despatches of high value fabric take place during the later part of the year, hence the performance of the half year period is not representative of full year's performance."

"Raymond divested its steel and cement divisions in September 2000 and January 2001, respectively. The resultant net profit on such divestment was included in exceptional items for fiscal 2000-01. Therefore, the figures for the current periods are not comparable with those of the previous periods," said Pradeep Bhandari, president, finance, Raymond.