Titan Industries has finally wound up its European operations after suffering losses of Rs 110 crore in the continent during the last decade.
According to the company, it has provisioned for these losses from FY03 and made the final provision during FY07.
The Rs 2,000 crore company had entered 12 countries in Europe in the early '90s and exited in December 2006.
The company, however, made losses throughout the 1990s and, in 2004, withdrew from eight of these countries.
Following this, it was present only in Britain, Spain, Greece and Portugal.
Since December 2006, it has ended its European operations completely, except for selling the Titan Edge watches in a small territory through an old distributor.
The company lost out in Europe on three counts. First, it was not able to compete with the popularity of the Swiss and the Japanese watches in those markets. Second, Titan made the mistake of not spending enough time and money on acquainting people with the brand in Europe.
Third, the company, owned by the Tatas and Tidco, did not spend enough money on advertising and launched its brand in all the 12 territories in a very short time, instead of gradually testing the market and opening in phases.
With the foreign expansion of its jewellery division, Tanishq, on the cards, Titan is more careful this time around and will open in a small way first and gradually expand to other territories after testing the markets. Till the end of 2006, Titan had suffered cumulative losses of Rs 110 crore and by the end of FY07, it had made up for these losses by way of provisions.
Titan started provisioning for the losses from FY03 and by the end of FY04, it had already provisioned for Rs 63 crore.
Between FY05 and FY07, it provisioned for the remaining Rs 47 crore.
"Starting from 2002-03, Titan Industries has been providing for the losses and has made all necessary provisions to date," said K F Kapadia, executive vice-president, finance, Titan.
The company, however, has not abandoned its foreign operations completely.
At present, it has operations in 27 countries in Asia and Africa and plans to foray into Thailand, South Africa and Iran soon. International operations contribute 15 per cent to Titan's watch division's total revenue.
The company plans to increase the investment in its foreign operations by 70-80 per cent.