ECONOMYNEXT - Sri Lanka's listed fashion retailer Odel said it has acquired a 100 percent stake in Cotton Collection for 300 million rupees to diversify its product portfolio anticipating a fashion-retail boom.
"The decision to enter into this transaction is in line with the company's strategy of expanding the product portfolio and retail foot print," the company said in a stock exchange filing on Wednesday.
The acquisition will give the group 'significant' flexibility in terms of brand positioning utilizing product portfolios of both Odel and Cotton Collection, Odel said.
It is also expected to create synergies of back-office processes and human resource functionality.
The 100 percent stake in Cotton Collection was bought from founder Niloufer Esufally Anverally.
Cotton Collection has 15,000 square feet of retail space across five outlets and employs 200 people.
"Cotton Collection comprises of a home-bred design team that curates bohemian, free-spirited collections that has carved out a niche market share over the years," a statement from the company said.
--Fashion retail boom--
"Fashion, and the interest therein, is only growing," Ashok Pathirage, Odel's Chairman said in a statement announcing the acquisition.
The addition of new malls in the city is expected "open out more retail space to the market and tremendously upgrade the retail shopping and lifestyle experience of the consumer," he said.
The Colombo City Centre Mall opens in September, while The Shangri-La Mall is slated to open in 2019.
Odel is investing 8.3 billion rupees on a mixed development project including a 645,000 square feet mall in Colombo.
"We feel we are well positioned as a group to tap into the immense growth potential that retail would offer and thereby further consolidate our presence in this segment," he said.
Odel's June quarter profits fell 50.6 percent from a year earlier to 21 million rupees on lower consumer spending and high finance costs on loans taken out for the mixed development project.
Earnings per share in the quarter amounted to 8 cents. Odel opened trading Wednesday 50 cents higher at 24.50 rupees.
"The decision to enter into this transaction is in line with the company's strategy of expanding the product portfolio and retail foot print," the company said in a stock exchange filing on Wednesday.
The acquisition will give the group 'significant' flexibility in terms of brand positioning utilizing product portfolios of both Odel and Cotton Collection, Odel said.
It is also expected to create synergies of back-office processes and human resource functionality.
The 100 percent stake in Cotton Collection was bought from founder Niloufer Esufally Anverally.
Cotton Collection has 15,000 square feet of retail space across five outlets and employs 200 people.
"Cotton Collection comprises of a home-bred design team that curates bohemian, free-spirited collections that has carved out a niche market share over the years," a statement from the company said.
--Fashion retail boom--
"Fashion, and the interest therein, is only growing," Ashok Pathirage, Odel's Chairman said in a statement announcing the acquisition.
The addition of new malls in the city is expected "open out more retail space to the market and tremendously upgrade the retail shopping and lifestyle experience of the consumer," he said.
The Colombo City Centre Mall opens in September, while The Shangri-La Mall is slated to open in 2019.
Odel is investing 8.3 billion rupees on a mixed development project including a 645,000 square feet mall in Colombo.
"We feel we are well positioned as a group to tap into the immense growth potential that retail would offer and thereby further consolidate our presence in this segment," he said.
Odel's June quarter profits fell 50.6 percent from a year earlier to 21 million rupees on lower consumer spending and high finance costs on loans taken out for the mixed development project.
Earnings per share in the quarter amounted to 8 cents. Odel opened trading Wednesday 50 cents higher at 24.50 rupees.
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