Highlights of the conference call are
- Brandhouse Retail is the master franchisee for leading domestic brands including Reid & Taylor, Belmonte, Carmichael House and Stephens Brothers and exclusive India franchisee for International luxury brands like Alfred Dunhill.
- BHRL has been involving in the setting up and managing of over 670 EBO’s (Exclusive Brand Outlets) for various brands across India with a special focus on fashion and lifestyle, as the fashion textiles constitute 36% of the share in the Indian organized Textile Industry.
- The company in month of February 09 has entered into a Joint Venture agreement with Oviesse, a leading Italian ‘fast fashion’ retailer to set up 190 private label format stores across the country over next 5 years. The store roll out is expected to commence later this year and continue for the next five years setting up stores across metro / tier 1 / tier 2 cities. The equity requirement over 5 years will be Rs. 161 crore.
- For the first year the JV will, import the merchandise from Italy and thereafter will introduce local sourcing / manufacturing in a phased manner in order to minimize costs. The company plans to open 15 stores in the first year with an investment of Rs 71 crore.
- Thus newly demerged entity – BHRL will operate in two strategies – through already existing EBO’s and through the newly entered JV with Italian retailer Oviesse which holds 37.5% in the Joint venture.
- As on quarter ended December 08, the company has 242 Reid & Taylor, 203 Belmonte, 201 Carmichael House and 19 Stephen Brothers and 3 Dun Hill EBO’s totaling to 669 EBO’s covering around 66000 sq ft of the area. Of the total store, the company owns 348 stores and the rest 335 stores were Franchise Network stores.
- Under Franchise Network stores, Franchisers will get the stock from the company at a whole sale price plus 4% of overriding from the company.
- Going further, the company has capex plans of Rs 115 crore for FY10 and assures to maintain Debt to equity ratio of 2 for FY 10.
- The debt on books is Rs 110 crore; Working capital cycle of 90 days. The average cost of Debt is 14%.
- The Net worth of the company is Rs 120 crore, and the equity is Rs 53.60 crore.
- The company plans to scale up its stores count to 900 stores in FY 10. It also estimates to reach revenues of Rs 800 crore, EBITA of Rs 79 crore and PAT of Rs 22 crore by FY 10.