Comfort fit

Mumbai, Sept. 14: Raymond Ltd will divest its 74.1 per cent shareholding in ColorPlus Fashions Ltd to Raymond Apparel Ltd, its wholly-owned subsidiary.

The decision of the board was communicated to the bourses. According to Raymond, this is part of its initiative to consolidate the apparel business. There is, however, no consideration involved as the transfer is in the company itself.

After the divestment, Raymond Apparel will have four brands under its belt. These are ColorPlus, Park Avenue, Parx and Manzoni.

The combined sales of these four brands is around Rs 400 crore. Raymond had acquired the stake in ColorPlus Fashion in 2002 for Rs 58 crore.

According to the understanding reached then, the remaining holding is to be purchased after 42 months based on the future performance of ColorPlus. The acquisition fortified Raymond’s role in the premium menswear apparel business.

Among the other brands of Raymond Apparel, Park Avenue has a major presence in the formal menswear category. On the other hand, Parx is a well-known casual wear brand, while Manzoni has been positioned as a luxury lifestyle brand for the classy customer.

Following the consolidation, the major portfolio of Raymond Ltd will include textiles, files and tools and denim. Over the past few months, Raymond Ltd has announced massive investments in its core business to benefit from the removal of quotas since the beginning of this year. It earlier announced an investment of Rs 100 crore to expand its denim capacity by 10 million metres to 40 million metres in the next 12 months.