Koutons to launch premium brand

Koutons restructures by closing down the loss making stores

Koutons Retail, the Delhi-based apparel retail chain, plans to launch a premium brand soon as part of a plan to improve cash flows, announced a top company official.


The main reason of its success apart from comfort, design and quality, was  50-80 per cent discounts on brands such as Koutons Menswear, Charlie Outlaw, Les Femme and Koutons Junior, which had the youngsters and go getters going for the loot.


“We are planning to launch a premium brand shortly for which we are in talks with various parties,” Ajay Mahajan, chief financial officer, added in information.


Mahajan said the company was in the process of shutting 50-60 losing stores to improve cash flows. The company has shut nearly 200 stores in the past 18 months to stem losses. It now runs 1,196 stores across the country, mostly owned by its franchisees.


Koutons posted net sales of Rs 161.5 crore in the first quarter of FY2011, down 58.1 per cent from the previous quarter and 19.9 per cent lower than the corresponding quarter last year. The reported profit after tax was Rs 5.5 crore, down 82.4 per cent from Q4 of FY 2010 and 52 per cent lower than Q1 of FY 2010.


It would also increase the capacity utilisation of the 18 manufacturing units and consolidate production for better efficiency, he said.


Early this week, Kouton’s chairman, D P S Kohli, informed that the company would be able to raise up to Rs 400 crore through a preferential share issue by the end of December. “We are in discussion with various private equity firms and hope to launch road shows soon,” he said optimistically.


It is certainly good news for Kouton lovers as they await to see more splash from their favourite brand.