Companies

Bombay HC orders folding up S Kumars

| Updated on: Jul 07, 2016
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Banks told to appoint an official liquidator to recover ₹4,500 crore debt

From stitching suits for US President Barack Obama to fighting court battle for survival, S Kumars Nationwide seems to have got its brand-wagon strategy wrong.

The Bombay High Court has ordered liquidation of S Kumars Nationwide assets and ordered the banks to appoint an official liquidator to recover debt. The company owes ₹4,500 crore to 134 banks, including State Bank of India and ICICI Bank and financial institutions.

Passing the judgment on July 1, Justice BP Colabawalla gave four weeks’ time for the company to appeal against the order, and in the meanwhile, directed the banks to appoint the official liquidator to take charge of all the assets, properties, stock-in-trade, books of accounts and bank accounts of the company.

The Court was hearing a winding up petition filed by ICICI Bank, Australia and New Zealand Banking Group, Edelweiss Asset Reconstruction Company, L&T Finance, IL&FS Financial Services, among others.

As of September 2015, promoters own just 3.59 per cent in S Kumars, while foreign and domestic institution and retail investors hold 96.41 per cent in the company.

S Kumars Nationwide did not respond to an e-mail sent by this newspaper till the time of going to press.

Riches to rages

Nitin Kasliwal, the promoter of debt-ridden S Kumars Nationwide, shot to fame in 2009 when he acquired leading US brand Hartmarx, which was best known for dressing President Barack Obama for $119 million. He also acquired several global brands to mark his presence in the global luxury segment.

It acquired exclusive rights under licensing agreements to manufacture and market selected products for premier brands such as Austin Reed, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Pierre Cardin, Lyle & Scott, Golden Bear and JAG Jeans.

In India, SKNL retails international luxury brands such as Alfred Dunhill and Escada and owns Stephens Brothers, Carmichael House and Belmonte.

In 1998, the company introduced the 175-year-old Scottish brand Reid & Taylor to India and marketed worsted and poly viscose suiting fabrics produced at its Mysuru plant in Karnataka and Dewas in Madhya Pradesh. The company took advantage of huge subsidiary offered by the government to set up textile units.

Following an expansive strategy, Kasliwal roped in Bollywood superstar Amitabh Bachchan to promote Reid & Taylor suitings and doubled up advertising campaign for home-made textiles.

Everything was going well for company till 2012 despite its unsuccessful attempt to raise ₹1,000-crore through initial public offering of Reid & Taylor. From its peak of registering net profit of ₹471 crore in FY-12, the company started crumbling under its debt burden and huge interest outgo.

The subsequent economic slowdown and cut down on luxury spends by consumers led to downfall of the company. It last reported a net loss of ₹209 crore on a revenue of ₹544 crore in the June quarter of 2014.

Can the brand-heavy company stitch a strategy to get back into business without fresh fund infusion? Only time can tell.

Published on January 17, 2018

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