Stock broker Rakesh Jhunjhunwala has acquired a 5 per cent stake in the Chaturvedi family-controlled Provogue India for an undisclosed sum and joined the board of the Mumbai-based apparel company.
The Chaturvedis, meanwhile, have merged their companies-Acme Global (which focuses on exports), Acme Clothing (which owns the Provogue brand) and Acme Hospitality (Provogue Lounges) to form Provogue India.
The newly formed company will be in place by the end of January and will hold the Chaturvedi family's interests in textiles, including fabrics, dyestuffs, chemicals and textile machinery.
Nikhil Chaturvedi, managing director of Provogue India, said, "The resources raised through the stake sale will be used to fund the company's expansion plans. We are setting up a trouser manufacturing facility at Daman, which will have a capacity to manufacture 2,000 trousers a day. Also, we are adding up 22 Provogue studios, thus increasing our presence from the current 53 studios."
Provogue India currently has a shirt manufacturing facility at Daman with a capacity to manufacture 3,000 shirts a day.
"The realigned textile and apparel group will be better placed to manage all aspects of the textile supply chain and will be better equipped to focus on developing its brand in India," Chaturvedi added.
The Rs 106 crore (Rs 1.06 billion) Provogue India has targeted a 60 per cent growth in revenues in 2005-2006.
The company has also expanded the board by inducting Colvyn Harris, chief executive officer of J Walter Thompson (India), and Tim Eynon, former general manager of Cargill Dow and vice president of Tencel Fibers.
"Now that this team has joined us, we will be superbly positioned to face the challenges of the next growth phase of the business, which will involve retail expansion, product development, brand enhancement and financial structuring," Chaturvedi said.
Two other textile companies have attracted investments --Bennett, Coleman & Co acquired 12 per cent of the equity of Celebrity Fashions, while Pantaloon Industries acquired a majority stake in the Bangalore-based Indus League, owners of the Indigo Nation and Scullers apparel brands.
The Rs 55 crore (Rs 550 million) Provogue brand is endorsed by Bollywood star Fardeen Khan. Positioned as a lifestyle brand, it will be extended to shoes, watches and perfumes. The company is looking at licensing the brand in the accessories segment to third parties.
