Its stock closed at an all-time low on Thursday. Investors are deserting the counter following reports that the garment maker was unable to repay its loan to one of its lenders. In the past few years, the growth of companies in the retail sector has been hampered due to their heavy financial burden, which has squeezed their net profit margins. Earlier, most of these companies had adopted a strategy of expanding operations on borrowed funds hoping that the better future operating cash flows could help service debt.
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In fact, India has been ranked as the most attractive country for retail investment among 30 emerging markets. However, the ride for this rapidly growing industry does not come without its share of topsy-turvy turbulences. Advertisement There are various challenges being faced by the organized retail sector in India which are creating hurdles for the industry in reaching its full potential.
Some of the concerns are lack of retail space in the eyes of escalating real-estate prices, shortage of trained manpower, shrinkage or fraud in retail and most of all funding constraints and regulatory hurdles. The sector has already witnessed a couple of victims in the form of Subhiksha and Vishal Retail. While Subhiksha became a victim of aggressive expansionary plans — in a tearing hurry to roll out stores; Vishal Retail just managed to scrape through by way of deal to sell its business to PE player TPG Capital for wholesale arm and Shriram Group for retail arm.
Thus, the struggle has been more intense for the smaller players within the industry for whom the retailing has been a grind within the country. The challenges range from improper inventory management to inefficient back-end in place. Often, the lack of sound supply and logistic chain has kept the smaller companies struggling to make ends meet. Another likely candidate to the list of accident-prone domestic retail companies could be — Kouton Retail India.
However, other reports suggest that the Apparel retailer has only delayed payment to its lenders and it might not be a case of loan default.
The interest payment to banks has been delayed by days. Koutons has a total debt of Rs. Payment of 2 monthly instalments, totalling to Rs. In the Last 2 months, the stock price of Koutons Retail slumped from Rs. Currently, Koutons promoters hold Further, the analysts fear that the promoters might have pledged for the second time in the last three weeks triggered by steep fall in prices recently.
In the June quarter, the company witnessed shrinking margins on account of pile-up of inventory, some of which could have been sold at the discounted rates to the customers. Will Kouton succumb to the pressures or will it become an acquisition target by some bigger retailer?
Koutons Retail India Ltd
The Company was converted into a public limited company and its name was changed to Koutons Retail India Limited with effect from June 27, Charlie Creations which had Mr. BS Sawhney and Ms. Amarjit Kaur as partners the Firm , along with all its assets and liabilities. Pursuant to this object we entered into a Sale of Business Agreement with the Firm on January 2, in order to acquire the business of the Firm as a going concern with effect from January 1, Under the Sale of Business Agreement, we acquired all the assets and liabilities of the Firm appearing in its balance sheet as on December 31,, including plant, machinery and fixtures owned by the Firm, cash in hand, debts due to the Firm, stock in trade,consumable stores and immovable plant and machinery, trade marks, design and licenses owned or obtained by the Firm, benefits accruing to the partners of the Firm from all contracts, pending subsisting or under execution, the loan availed from the Bank of Baroda and all other statutory dues or liability. We acquired the business of the Firm for a total consideration of Rs.
Koutons Retail India Ltd.
Add this company to your Portfolio. We will never share or display your Email. For the quarter endedthe company has reported a Standalone sales of Rs 4. Top Trading Ideas 31 December Pursuant to this object we entered into a Sale of Business Agreement with the Firm on January retzil, in order to acquire the business of the Firm as a going concern with effect from January 1, What are Multi baggers? Kailash Chandra Sharma, Mr.
Retail Industry Failure – Koutons
KOUTONS RETAIL INDIA LIMITED