House of Pearl - Press Release

• Security Code: 532808
• Company: PGIL

House of Pearl Fashions Ltd (HOPFL) has announced that the Company has acquired 50% stake in the UK-based marketing Company, FX Imports Ltd, through its subsidiary in the UK - Poeticgem Ltd. HOPFL would get control of the board. The Company has been working at strengthening its distribution muscle in the overseas markets.

The acquisition will benefit the Company in expanding its customer base into high fashion mid market segment. FX Import will also gain by offering wider product range to its existing customers and can leverage HOPFL sourcing, designing and warehousing capabilities in UK, enabling them to offer value added services to its clients.

FX Imports Ltd is a leading marketing Company in UK, catering to mid market fashion retailers. FX Imports clocked a revenue of Rs 80 crore last fiscal and is projected to touch an annual revenue figure of Rs 200 crore in three years. Marketing and distribution today accounts for 70% of the overall revenue of HOPFL. It reported a total income of Rs 952 crore for 2006-07.

The acquisition will be funded through internal accruals. HOPFL has the option to buy the rest 50% stake from the promoters of FX Import Ltd, in the next five years.

"Poeticgem is well established in the value segment in the UK and with this acquisition has opened up opportunities to enter higher end of the market that offers better margins. There is great potential to optimize synergies of both Companies which would help rapid growth of their business and improve profitability," Mr. Deepak Seth, Chairman, HOPFL.

House of Pearl offers complete supply chain solutions to some of the top retailers internationally. It has its operations spread over 10 countries and tie-ups with over 150 compliant manufacturers. The Company also owns two apparel brands and warehouses in the US. HOPFL has its own manufacturing facilities spread over three countries and that has perhaps partially saved it from the effect of rupee appreciation. It managed a profit of close to Rs 29.36 crore in the first half of this fiscal, while many other exporters saw a decline in profit or loss.

HOPFL has recently tied-up with European marqee brand Lerros to set up retail chain in India. The Company has also been on the lookout to acquire retail and distribution firms in the US and Europe.