Koutons Retail prunes its act

Friday, 06 May 2011

Koutons Retail India a retailer of readymade and fashion wear brand with more than 1,400 outlets across India, is close to liquidating its assets worth Rs 100 crores. This will help them revoke the pledged shares. The 20-year-old brand is now roughing it out and has gone into debt restructuring and is trying to raise funds to sustain its leading status. However, fundraising won’t be easy at this moment unless Koutons gets out of the CDR process and turnaround the company and create a certain value after which the investors can look into it. But the consolidation process that Koutons is going through, has marked around 750-800 stores, which are good viable and profit making.

The stores which were loss-making, or which were being cannibalized, or due to some reason were not generating much profit, are already in the process of closing or have closed down. Now, the company is focusing on 750-800 stores. According to the chairman DPS Kohli, they have enough inventories, but there is a mismatch in terms of size, color or varieties. According to him from 1,400 stores they are down to 940. Almost 500 stores have closed down in the last one year. This is part of their consolidation plan. They have reduced capacities on the rental factories that they had.

Kohli is hopeful with the amount they are infusing, plus some assets that they will sell-off, they will be able to regroup the inventory and just focus on 750-800 stores. And within one year they will be turning around the company. From 800 they can start the journey back, but initially they will focus on the 800 stores for the next two years.