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Archies dismisses rumours of stake sale to Videocon

Archies dismisses rumours of stake sale to Videocon
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First Published: Sat, Sep 05 2009. 12 06 AM IST

 Strategic tie-ups: Archies joint managing director Pramod Arora.
Strategic tie-ups: Archies joint managing director Pramod Arora.
Updated: Sat, Sep 05 2009. 12 06 AM IST
Mumbai: The retail chain that sells greeting cards and gift items, Archies Ltd, has recently seen a rally in its stock prices. The firm’s joint managing director, Pramod Arora, said in an interview that Archies hoped to grow at 18-20%, the rate at which it had been growing a year ago. He also clarified that it was not looking to sell any stake to Videocon Industries Ltd, a maker and distributor of household goods and electronic items. Edited excerpts:
Strategic tie-ups: Archies joint managing director Pramod Arora.
You posted a net loss last year because of a foreign exchange derivative. How is business this year? What kind of sales and profit growth do you think you can report for 2009-10?
I guess we expect to grow at around 18-20%. The profits will be back, they are already back as you might have noticed in the Q1 results. We again hope to be in line to grow over the year before.
Are you forging any alliances with companies like Shoppers’ Stop or any other malls? Secondly, Videocon Industries was looking to buy some stake from you. Are you still looking at any kind of strategic partners?
There is nothing on the anvil as far as that is concerned. But on your first question about strategic tie-ups with other retail chains, we are already working on it, which we started last year.
We have tied up with quite a few modern trade and other retail chains. We are now present in quite a few of them with either a shop-in-shop or a kiosk or something of that sort, different models with different people, which we feel is going to be a pretty big growth driver in the years to come.
For the last 20-30 years, I have seen Archies everywhere. Yet in the last five-six years as India has boomed, you have gone from Rs100 crore to only Rs139 crore. Could you tell me what is wrong? It is a brand everybody knows, it is found everywhere, and yet the sales don’t seem to show up the numbers they should. What is wrong here?
No, there is nothing wrong here. The thing is that our business is a low-ticket business. Globally if you look at the top two companies, which is Hallmark and American Greetings, their social expression business is to the tune of $2.6-3 billion (Rs12,714-14,670 crore).
These are companies that are 100-year-old. They are the leaders in the world in this business. You are comparing Archies with other businesses that make revenue of $1 million a day.
When do you see yourself go to Rs200 crore? Do the current promoters want to be in this business or do they sell this off to some bigger player?
We are very much there to be in this business...Rs200 crore I see somewhere around within the next maximum three years.
cnbctv18@livemint.com
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First Published: Sat, Sep 05 2009. 12 06 AM IST