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Tuesday, 19 October 2010 |
Koutons Retail, the Delhi-based apparel retail chain is planning to launch a premium brand with
the aim to improve cash flows. The company has shut nearly 200 stores in the past 18 months to stem losses. It now runs 1,196 stores across the country, mostly owned by its franchisees. Koutons was born in 1991 as Charlie Creations and started primarily as a denim brand. It’s today manufacturing and selling complete men’s, women’s and kids’ wear under the brand name Koutons, Les Femme and Koutons Junior respectively. Another brand from their stable is Charlie Outlaw, which caters to teens with jeans, T- shirts, jackets etc.
Koutons was recently in the news after its stock fell over 45 per cent in the week from September 27 after rumours about the company defaulting on its bank dues and its poor financial health floated in the markets. Koutons has also seen some exits in recent times including three directors and two senior executives, including the CFO. The exits have not led to a liquidation of investments by private equity investors so far. Most of the major shareholders remain invested in the firm.
Koutons posted net sales of Rs 161.5 crores in the first quarter of FY2011, down 58.1 per cent from the previous quarter and 19.9 per cent lower than the corresponding quarter last year. The reported profit after tax was Rs 5.5 crores, down 82.4 per cent from Q4 of FY 2010 and 52 per cent lower than Q1 of FY 2010. It plans to increase its capacity utilisation of 18 manufacturing units and consolidate production for better efficiency. Analysts say the company has been facing inventory pile-up for some time, which suggested it was not able to sell its stock. |
