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Divya Trivedi

Mumbai, Oct. 19 Multi-product textile manufacturing company Shri Lakshmi Cotsyn Ltd will venture into retailing of its terry towels and bed linen under the brand name Shri Lakshmi.

The first store will be launched in Delhi before Diwali, followed by stores in Chennai, Ludhiana, Chandigarh and Kanpur among other cities.

The company intends to use its existing dealer base and open stores on a franchisee basis with an investment of Rs 1 crore per outlet. It will not offer its entire range of products in the retail outlets to avoid direct competition with its 300 established dealers.

The products will be priced at medium to value range, and a discount format for stores is not ruled out, Mr M.P. Agarwal, Chairman and Managing Director, told Business Line. “The Indian consumer today is looking for discounts in every product but my marketing team has to decide that, I cannot make a comment on it,” he said.

Starting with a franchisee model, the company gradually plans to set up company-owned stores, “We hope to set up company-owned showrooms after our Roorkee project gets commissioned in March 2008,” he said.

The company recently raised FCCB for Rs 40 crore ($10 million) to meet the capital expenditure of its garment division at Roorkee and will include garments in the retail portfolio of the company-owned stores.

The company earlier informed the BSE that it plans to increase its terry towel production from 3,000 tonnes per annum to 12,000 tonnes per annum and bottom weight manufacturing capacity from six million meters to 12 million meters with a capital cost of Rs 275 crore. The expenditure would be financed through term loans under TUFS and equity.

The company posted an increase of almost 300 per cent in its net profit at Rs 15.03 crore for the quarter ended September 30, as compared to Rs 5.10 crore for the same period last year.

Sales increased by 134 per cent to Rs 230.6 crore, from Rs 98.5 crore for the corresponding quarter last year.

More Stories on : Channels and Franchises | Diversification | Textiles | Retailing

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