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Aditya Birla Rejigs Apparel Biz Top Deck

21 April, 2010

Aditya Birla Nuvo’s textile and apparel business, which is India’s largest player in the branded clothing with Rs 1,115-crore in revenue, has effected a top-level rejig. Aloke Malik, who was president of Peter England Fashions & Retail Ltd, is moving on to another group company Idea Cellular Ltd. The current president of Madura Garments LIfestyle & Retail Ltd, Ashish Dikshit, will now spearhead the de-merged operations of Peter England Fasions & Retail as well.

The development could be a prelude to impending structural changes in Aditya Birla’s apparel business, which is in the midst of dismantling cost structures built-in during the boom period, as it emerges from the red. Aditya Birla may be simplifying the operational structure once again with Ashish Dikshit taking over the entire fashion brands and retail operations. Dikshit, an IIM-B graduate, has had a stint in Aditya Birla Group Chairman Kumar Mangalam Birla’s office before moving in as president of Madura Garments Lifestyle & Retail. 

In response to an email query, an aditya birla spokesperson decilined to comment.

The erstwhile monolith Madura Garments was carved up into Madura Garments Lifestyle & Retail, Peter England Fashions & Retail and Madura Garments Exports Ltd in an ambitious restructuring three years ago. Aditya Birla had plans to stitch Madura – with a portfolio that included Louis Philippe, Van Heusen, Allen Solly and Peter England – into a billion dollar enterprise by 2011.

Peter England Fashions & Retail was identified as a growth vehicle, with Aditya Birla lining up Rs 400-crore investment to transform the mid-priced brand Peter England into a chain of family stores called ‘People’. In 2008, Aditya Birla was betting on generating Rs 1,400 crore business through a network of 80 odd People stores. Aloke Malik was roped in from Reliance Retail for spearheading one of Aditya Birla’s most ambitious retail projects alongside ‘More’.

The strategy was to chart aggressive growth in both the premium lifestyle and mid-priced segments through two seperate entities, Madura Garments Lifestyle & Retail and Peter England Fashions & Retail, both of which had operational independence.

This business re-engineering came on a high cost base with retail aggression and corporate expenses dragging the operations into deep red during the downturn in 2008-09. Pranab Barua, an FMCG veteran and advisor to Kumar Mangalam Birla, was put in-charge of the apparel and texile businesses with a mandate to bring it back to black. Dikshit will continue reporting into Barua.

The operations of Peter England Fashions & Retail has been whittled down with the family store retail format axed, and Madura Garments Lifestyle & Retail checking its aggressive expansion plans and corking its joint venture plans with a few international brands. Meanwhile, Madura Garments Exports Ltd, a contract garment producer catering to export markets, is believed to have had a new business head in ES Shankar who has had previous srtints with Donear and Raymond.

The garment export business went through a tough phase in the last two fiscals on the back of deteriorating consumer sentiments and currency volatility. Speculation was rife sometime back that Birlas may look at exiting this business, which they had denied. While the global economic recovery may add some buoyancy to contract exports, the currency challenges still remain, with the weakening of euro agianst Indian rupee being the latest worry. 

The metals-to-telecom conglomerate, Aditya Birla, has had a rollarcoaster experience in the fashion clothing space ever since it acquired Madura Garments from Coats Plc for Rs 236 crore in 1999. Madura has been through several top-level changes in the past decade as its ambitions were at times not in sync with a young and evolving industry. Still, the Birlas have put Madura Garments well ahead of its nearest rivals Arvind Ltd and Raymond who have had their share of woes in recent years.


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Aditya Birla Rejigs Apparel Biz Top Deck

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