Financial Daily from THE HINDU group of publications
Tuesday, May 13, 2003
Financial Daily from THE HINDU group of publications Tuesday, May 13, 2003 |
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Corporate
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Announcements Archies to exit perfume biz Neha Kaushik
NEW DELHI, May 12 FACED with mounting losses, Archies Ltd has decided to exit from its perfume business. The company's perfume division had made losses of about Rs 2.02 crore in the last fiscal. According to a company official, the performance of the division was responsible for the shrinkage in the company's bottomline last year. "The division was consistently incurring losses and we were unable to sustain it. We have decided now to concentrate on our core areas of retail, greeting cards and gifts," the official said. Interestingly, the company is also considering to ink an agreement with a third party, on non-exclusive basis, to grant a licence to use the `Archies Parfum' brand name on royalty basis. Archies' perfumes division commenced operations in April 1999. Apart from its own retail outlets, the product was available in other retail stores as well. However, industry analysts point out that with a plethora of foreign perfumes/deodorants available in the Indian market in the same price range, selling a home grown brand was bound to be a tough ask. Archies is also planning to reduce expenditure on its e-business venture, called Archies Online. " The e-business did not shape up as expected. Although we will not discontinue with the website, we will reduce our expenditure on the division," the official said. Meanwhile, a major focus for the company will be on the retailing front this year. "We are targeting to have a presence in about 50 per cent of all the upcoming shopping malls." The companies recently announced results reveal that the net sales for the company slipped to Rs 76.22 crore in 2002-03 from Rs 80.47 crore in 2001-02, while its net profit declined to Rs 3.07 crore from Rs 7.53 crore. "We will strengthen our position in the three focus areas this year and try to improve our bottomlines. We have already lost a lot of money in new ventures", the official said. Even Archies' initiative during the cricket world cup period to buy rights for the ICC mascot `Dazzler' did not pay huge dividends for the company.
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