Van Heusen may source from abroad to avoid excise impost

Swetha Kannan Bangalore | Updated on March 18, 2011

van heusen

Apparel brand Van Heusen may look at sourcing from Bangladesh and Sri Lanka.

With the imposition of 10 per cent excise duty on branded garments, apparel brand Van Heusen may look at sourcing from Bangladesh and Sri Lanka as that could be more financially viable.

“So far, manufacturing in India was financially viable. But with the excise duty, it may be more viable to source from Bangladesh and Sri Lanka, which are known for making basic stuff. So we may source basic formals from these countries. India has free trade agreements with Sri Lanka and Bangladesh — so the merchandise will not attract import duty,” said Mr Ajay Ramachandran, Brand Director – Van Heusen, the premium brand from Madura Fashion and Lifestyle.

Currently, 90 per cent of the brand's manufacturing is done in India. Winter jackets and knits are sourced from China.

The brand plans to hike retail prices by 8-10 per cent from April 1, owing to the excise duty. With cotton prices on the upswing, there could be another price hike in seven-eight months. “The effective price rise in eight months would be around 20 per cent. This will impact profit margins by 2-3 per cent, he said.

Van Heusen expects to finish this financial year with a turnover of Rs 650 crore (against last year's Rs 440 crore), despite the impact of spiralling cotton prices.

Published on March 17, 2011

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