Monday, January 31, 2005
Benett Coleman buys stake in Pantaloon and Celebrity Fashions
Bennett, Coleman & Co Ltd has announced that it has struck deals to acquire stakes in Pantaloon Retail (India) Ltd and Celebrity Fashions (P) Ltd, makers of the Indian Terrain clothing brand. Bennett Coleman will acquire 4.53% in Pantaloon, and 12% in Celebrity Fashions. The Pantaloon deal is aimed at raising funds for the purpose of expansion, according to an unnamed company official. Launched in 1987 as a menswear maker, Pantaloon is now a leading retailer running stores, hypermarkets and food bazaars. Pantaloon has definitive plans to increase its space capacity to 3 million sq. feet (278,700 sq. metres) from one million over the next 18 months. Pantaloon would issue 9,53,653 fresh shares at Rs 734 each to Bennett Coleman. Pantaloon will also issue 408,165 convertible warrants to its founders at Rs 735 each. Bennett Coleman will shell out about Rs. 70 crore for the stake in Pantaloon. After the conversion of these warrants, Bennett, Coleman will hold 4.26% in the expanded equity. In the tie-up between Bennett Coleman and Celebrity Fashions, while the Chennai based company, which owns the popular Indian Terrain brand of men’s casualwear, is eager to strengthen its brand and gain enhanced mindshare amongst middle-class urban consumers, Bennett Coleman has the right media mix to spread the message. The four-year-old Indian Terrain brand, growing at a fast 15%, is set to cross Rs 35 crore in sales in 2004-05, and competes directly with brands like Raymond’s ColorPlus and Allen Solly. Currently operating through nine manufacturing facilities in Chennai, Celebrity Fashions supplies apparel to iconic American and UK-based fashion brands like Timberland, JC Penney, Diesel, Banana Republic, Quicksilver, Nautica and Marlboro. Celebrity Fashions has independent design studios to cater to foreign brands.