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INDIA BUSINESS WORLD - May 2005
THE MONTH THAT WAS
RELIANCE BUYS 25% IN KIDSWEAR CO GINI & JONY
The Reliance group has picked up a 25% stake in the Mumbai-based kidswear major Gini & Jony Apparels for an undisclosed amount.
The investment has been made through an associate company of the Reliance group.
Gini & Jony is expected to use the funds mainly for financing its capacity and retail expansion plans. The company, which has a turnover of Rs 45 crore, is setting up a garment unit with a capacity of 1,50,000 pieces per month at Baddi in Himachal Pradesh. Its total capacity will vault to 2,65,000 pieces per month after the completion of the proposed expansion, according to industry sources. Gini & Jony's existing unit is located at Daman. The company is promoted by Prakash Lakhani.
The company, which has around 25 exclusive stores and 75 shop 'n' stop outlets, is expanding its retail presence also. It is in the process of setting up an additional 25 exclusive stores. The company, which mainly sells the Gini & Jony brand, is introducing a new range of lifestyle products for kids, including accessories like belts and sunglasses.
Branded kidswear and lifestyle companies have now caught the fancy of private equity investors and leading apparel companies.
Since large apparel companies are not present in the kidswear segment, leading apparel and retail majors have been eyeing stakes in kidswear majors. The kidswear market has been growing at the rate of 25-30%.
While negotiations are progressing, deals are not happening, mainly due to valuation issues.
Apparel companies are also coming out with initial public offers to raise funds for expansion.
The market size for branded youthware (including kidswear) market is about Rs 600 crore. The kidswear market alone has a size of Rs 350 crore. Major players in the market are Gini & Jony, Weekender Kids, Freelook and Planet Kids and Buddy Davis. Gini & Jony controls around 35% of the organised kidswear market. Gini & Jony is planning to make a foray into the Middle East and European markets. The total size of the organised apparel industry is around Rs 10,000 crore.
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