The Hindu Business Line : Titan revamps Europe operations — To focus only on 4 markets, to exit from 8

TITAN Industries Ltd, the country's largest watchmaker, has completed restructuring its troubled European operations by exiting eight out of the 12 markets it entered in the early 90s.

It will now focus on four key markets for the brand - the UK, Spain, Greece and Portugal - even as it has significantly reduced staff strength at its London office after provisioning close to Rs 63 crore to accommodate losses made in the last decade.

"Titan International Marketing Ltd (TIML), the associate company in London, has sized down operations to four markets and has downsized its staff strength by shifting backend operations to India. The London office now has only two people as against 22 earlier. The parent company made an additional provisioning of Rs 25 crore last year to make up the balance of the accumulated losses in Europe, taking the overall provisioning over three years to nearly Rs 63 crore," Mr Bijou Kurien, Chief Operating Officer (COO) of Titan Industries Ltd, said.

"And we believe no further provisioning is required and hope to close the chapter as far as our troubles in Europe is concerned," he added.

"By restricting ourselves to four markets, we are making sure that we are investing only in the larger markets for the brand. And we have cut costs by downsizing operations in London," Mr Kurien said.

Titan operates in these four markets through distributors focusing on the multi-brand outlet (MBO) channel. "We sit with them and make sales and marketing plans and come up with defined targets in terms of sales and distribution," he said. The funds employed in the European operations aggregate to $39.50 million and TIML had made losses to the tune of £9 million. Titan is jointly owned by Tatas and TIDCO with management control in hands of the former.

It must be mentioned that Titan's global ambitions received a lot of flak in the late 90s on account of what the critics termed "misadventures in Europe" even though its two other overseas associates, Titan International Middle East (TIME) in the UAE, and Titan Watches & Jewellery International Asia Pacific Pte in Singapore have been making operating profits for some years. TIME achieved significant growth in turnover to $15.89 million in 2003-04 from $7.86 million in the previous year.

Profits increased to $1.13 million from $0.54 million. The Singapore company saw sales at SGD seven million and the operation posted a profit of SGD 0.49 million.

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