Global recession and the European debt crisis have turned out to be an opportunity for Indian
garment manufacturers and exporters. Several exporters have been picking up controlling stake in European retailers to whom they have been supplying goods for years. Take Tirupur-based Prem Durai Exports for example which has acquired a 51 per cent stake in the Swiss leisurewear company Switcher Holdings, known for brands such as Switcher, Respect and Whale. Another exporter who has picked up a 90 per cent stake in the Italian apparel retail firm Ciao Ciao World is Chennai-based Naru Exporters.
Last year, S Kumars Nationwide which completed its acquisition of US clothier Hartmarx Corporation through its subsidiary SKNL North America. And in May this year it formed a JV with Donna Karan International. Many US and European companies have moved into financial trouble following the global recession and the European debt crisis. And garment exporters in India are now finding it easy to have a retail brand in Europe and the US as they have been manufacturing for these companies for long. The exporters also have the capability to run the European businesses from India.
While Prem Durai Exports has been handling 55 per cent of Switcher’s production, Naru Exports has been handling around 60 per cent of the production of Ciao Ciao. A 90 per cent stake in Ciao Ciao, which had a turnover of Rs 200 crores last year, was picked up by Naru for just Rs 35 crores. After its acquisition of Switcher, Prem Durai Exports will handle 75 per cent of the production in terms of value. On the other hand, Naru Exports will expand Ciao Ciao’s retail business to Germany, France and India. Ciao Ciao has 100 retail outlets in Italy and Switzerland.