The Hindu Business Line : House of Pearl in expansion, acquisition mode; IPO in 2007

The Gurgaon-based multinational apparel company, House of Pearl Fashion Ltd , is set to double its manufacturing capacity to a total of 40 million pieces in the next three years and is set to acquire a retail chain in the USA in a couple of months, its Chairman, Mr Deepak Seth has said.

The Group's unit, Pearl Global, is listed on BSE.

Announcing the Rs 800-crore Group's ambitious plans to a group of visiting journalists from Gujarat, he said that the company is also coming out with an IPO in a couple of months to mop up around Rs 400 crore to finance a slew of its plans.

Of this, Rs 110 crore would be meant for forward integration and Rs 150 crore for backward integration and acquisitions. The company already supplies to 60 major retailers across the world and is targeting to acquire chains having around 600 stores.

In talks

The company, Mr Seth pointed out, is already in talks with identified retail chains in the UK and USA and may clinch joint venture deals soon.

It is also evaluating entering the niche retail market in India by opening eight to 10 exclusive stores in the next few months, Mr Seth said.

The company's five manufacturing facilities in Gurgaon, one in Chennai and one each in Bangladesh and Indonesia, together, produce 20 million pieces at present.

It also has a financial interest in a manufacturing set up in China. The company has recorded net revenue of Rs 433.5 crore, a 30.6 per cent increase in the corresponding half in 2005, and its net profit increased by 100 per cent to Rs 25.8 per cent in the first half this fiscal over the last year's.

The 1987-founded company, which has been paying dividends, may also consider paying bonus to shareholders. HoPFL is the flagship company of the House of Pearl, an integrated, ready-to-wear supply chain.

It boasts of being the only business group in the apparel sector in India to set up international businesses in 12 countries, capture the strength of each of these country, and source from the cheapest and sell to the most expensive, according to Mr Seth.

He said the Group's operational decision-making is vested with the business heads and they have profit-sharing arrangements.

The Group also employs 250 foreign nationals in the management team for cross-cultural management philosophies and ideas about fashion and business from across the world.

Its Pearl Academy of Fashion, having collaboration with Nottingham Trent University, UK, serves as designing centre-cum-BPO and its business school in Gurgaon will start in 2008 in academic collaboration with Babson College, Boston, USA.

The Academy is expanding to Mumbai and Chennai and has started operations in Bangladesh and the UAE, he added.

The Group has three streams in its integrated business model, viz. manufacturing, distribution and branding and sourcing and international design and development inputs feeds into all these three, giving many choices to the customer under one umbrella.

Besides its three units in India, the Group has strategic relationship with 150 fully compliant manufacturing units spread across Bangla Desh, China and Indonesia.

This has placed at the company's disposal capacities of manufacturing more than 120 million pieces a year while it was using only 50 per cent of this at present.

The Group employs around 9,000 people, including 4,000 abroad.

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