Maxwell to launch 100 lingerie stores starting 2012

As the consumer sector continues to buoy the Nifty, Maxwell Industries has seen a 5% uptrend in stock price during intra-day trades. The company recently spun off its spinning business for a good Rs 39 crore. Sunil Pathare, Director of the company tells CNBC-TV18 that spinning was only a part of the business as they are majorly a branded innerwear company that also manufactures innerwear. Going ahead, Maxwell plans to open 100 lingerie stores in tier I and tier II cities in a span of three years from 2012.

Below is the verbatim transcript. Also watch the accompanying video Q: Could you tell us your plans with respect to the launching of retail stores?
A: We have planned to open a retail stores in 2012-2013. We currently have a concept, which is on a trial basis by the name Green Room, in which we have two stores. This is about 500 sq ft lingerie stores in tier II and tier III cities. We plan to open 100 such stores from 2012-2013 to in next three years time. Q: How much would you have to invest for launching these in this year and also in next year?
A: This model is on a trial basis in current financial year and we are very confident about this model working very well. From 2012-2013 onwards, we will be opening about 10 stores in 2012-2013 and thereon we will be taking it to 100 stores in coming year. Each store, generally the investment is about 30-40 lakh, it would be a rental model as well as a franchise model both put together. Q: Can you give us a rationale in terms of this diversification that you are undertaking?
A: Our company has got various brands like VIP is one of the major brands which is almost 40 years old, Frenchie is for the youth, Feelings is for the ladies. We are also coming with a brand for a kids now called Brat. Last year, we had launched a French lingerie brand called Eminence. So there are various brands into the company and for rural marketing we have a brand called Leader. As a company, we have various brands and there are possibilities that we also would be looking at one more international brand into our kitty. Each brand we are increasing the portfolios, not only into the lingerie, but we might get into the accessories. Innerwear industry is getting more fashionable, so it will be loungewear in each of the brands, it would be sportswear in each of the brands. So the portfolio will be increased into each of the brands. Q: The spinning business which you had sold in June, you have got around 40 crore from it, how exactly have you utilized it?
A: It is a deal in which we spin off the spinning mill. Spinning is not our core business. We are more of a branded innerwear company though the company is into the manufacturing of innerwear, as well as spinning also. So spinning was one of the businesses, for Rs 39 crore, which we had spin off and it is under the process now, the board meeting has been called and the decision has been taken. Q: How exactly have you utilized the 40 crore or have you already got the money, can you give us an update on 40 crore?
A: It is after the AGM which will happen, and after that the money will flow into the company. There are certain small capex plans for the upward strength like Rs 39 crore out of which Rs 5 crore will be the capex plan for upgradation of certain machines into the company. Besides that, the company will reduce its debt that has been there and the result of that would be that interest would be going down in the next financial year.