PRWire

Mumbai - The Arvind Mills Limited (BSE:500101 NSE:ARVINDMILL), flagship company of the Lalbhai Group and India’s largest integrated textile manufacturer and leading branded apparel and retailer with consolidated revenues of Rs. 2655 Crores in 2007 - 2008, announced today major plans to transform itself from a pure fabric and apparel solutions company to a strong diversified business group with focus on branded apparel and apparel retail . Also, on the drawing board are strategies to de-leverage the balance sheet.

“The new business environment presents new opportunities. We have looked at each business individually and adopted a strategy that best suits them respectively. Our efforts over last several years have brought us to a stage where we are ready to maximize the potential within our organization. With solutions in sight for our core business issues and tremendous growth opportunities in the new ventures we will emerge as a stronger, more competitive organization that is well-positioned to respond to and succeed in the ever-changing market place. We wanted to convey to the world this new thinking and direction at Arvind,” said Mr. Sanjay Lalbhai, CMD, Arvind Ltd.

The company will focus on enhancing its own brands as well as growing the global brands through partnerships and increasing its presence across customer segments and categories. Arvind expects a 40% CAGR in the Brands business driven by revenues from new brands such as US POLO, IZOD and Hartmarx group of brands and a 40% growth in its joint venture business. Arvind share of revenue from Branded apparel business is likely to be about Rs.700 crores in next two years time.

Arvind’s Apparel retail business, is to be focused on two segments of bridge to luxury and value retail. Value retail under the umbrella of MegaMart is targeting a 8 fold increase in revenue to Rs 1000 crores in 3 years spread over 1.9 Million square feet and over 270 doors through a combination of existing smaller format stores and the new initiative of larger format stores selling over 130 brands on discount. The first of the large format stores is operational in Chennai from January 2008 and another 5 stores in Pune, Hyderabad, Faridabad and Chennai are to be opened in 2008-09. The company targets to open 30 such stores in 21 cities over next 5 years.

The fabric business despite negative macro factors like current downturn in denim, the rising cotton & fuel prices and the appreciating rupee continues to generate positive cash accruals. The company is to realign its product portfolio and marketing approach from the existing traditional model. In the domestic market the company is going to evolve a direct fabric retailing initiative to target the premium customers in the country. In the larger industrial segment company is focusing on servicing the performance wear, work wear and industrial application fabrics. The company is also hoping to resolve the high energy cost problem with an alternative arrangement very soon.

The garment business is witnessing improved price realization, volume growth as well as profitability improvements due to productivity gains and will continue to add value to the textile business. The company is in initial stages of conceptualizing extending the garmenting expertise and marketing front end to build a buying house style operation.

To reduce the impact of high level of borrowings on the company’s profitability, Arvind is focusing on debt reduction using cash flows of fabric business as well as through unlocking of value in non strategic assets. “The company holds certain valuable but non strategic assets on one side and at the same time requires cash for its rapidly growing businesses, hence through a combination of cash flows from fabric operations, capital infusion from promoters and sale of non strategic assets we plan to raise about Rs.700 crores over 3 year to be utilized towards debt repayment” says Mr. Jayesh Shah, CFO, Arvind Ltd.

The Arvind Mills Ltd. also unveiled its new corporate identity and announced that the company has been renamed as Arvind Ltd. The new logo is an apt reflection of the company’s changed avatar. To present this new face of Arvind Mills, the company has embarked on a re-branding exercise and has roped in Bangalore based Ray+Keshavan to develop its corporate brand strategy, vision, values and design its new brand identity. All the sub-brands under Arvind will sport the new logo.

The new Arvind marque is composed of unique hand-crafted letters that reflects the unique organisation that is Arvind. Stylish, sharp but well rounded - the forms of the logotype stand for an organisation that is integrated and works across the value chain - from stylish fabrics to iconic brands.

At the same time the letterforms have an element of classicism and a sense of gravitas - symbolic of an organisation that has a rich heritage while remaining contemporary through changing times. The burgundy red also is iconic of a mature brand, its rich tones of red carry a sense of depth and more than a hint of passion that has built an institution called Arvind.

Highlighting the significance of the change in Identity, Mr. Lalbhai, said, “Over eight decades, we have changed the face of fashion by constantly evolving. As we get ready to address wider opportunities to create wealth for stakeholders, we have evolved new ways of thinking and a new direction. The new identity reflects the shift in the corporate identity from a large integrated textile player to a lifestyle solutions company and the name of the company reflects the same trust but new opportunities”.

The Brand’s Vision is to enable people to experience a better quality of life by providing enriched and inspiring lifestyle solutions. The Brand’s Essence is Enriching Lifestyles. The Brand Promise is bringing newness to consumer’s lifestyle and providing inspiring solutions to help deliver enriched lifestyle experiences to consumers. The Brand Values are Creative, proactive and effective where as the Differentiators are Collaborative relationships, people, innovations and global mindset.

About Arvind Ltd.
Established in 1931 as a global leader in the development and production of textiles, Arvind Ltd. is India’s largest integrated textile company and operates across the entire value chain from design to fabric to brands. Arvind was the first company in India to bring international brands when they brought Arrow to India. Arvind now has licensing relationships with many international brands like Arrow, GANT, Cherokee, USPA, Hart Schaffner Marx, Sansabelt, Pierre Cardin and JV with VF Corporation with brands like Lee, Wrangler, Jansport, Nautica, Kipling & Tommy Hilfiger.

In addition Arvind owns a number of successful Indian brands viz Flying Machine, Newport, Excalibur and Ruf and Tuf among others. The company also owns India’s largest value retail chain Megamart having 83 outlets in 30 towns. Recently Arvind also opened a 40,000 sq ft Megamart Outlet centre in Chennai.