Alok to sell UK chain

Alok Industries, the two billion dollars (Rs 11,861 crores) textile major wants to sell

the UK retail chain, Store Twenty One, which it had acquired five years ago. The sale is part of Alok's strategy to focus on sustainable growth oriented units. Of late, many Indian firms are moving to sell their overseas assets as the weakening global economy impacts business.

Alok's management has been closing down unprofitable outlets as part of the company's on-going cost-cutting and restructuring efforts. Selling the UK unit will help Alok cut debt. The textile firm has a long-term debt-equity ratio of almost 2:1. Alok Industries, the country's largest fully integrated textile company is getting out of the retail venture to focus on its strategic operations from which it derives the bulk of its revenues. Within the overall scheme of business, retail forms a small part. Apparel fabrics, especially woven, contribute 59 percent to Alok’s annual sales, followed by polyester yarn at 25 percent.

Analysts say, while the selloff plan is good, it will be difficult to execute it given the challenging market environment. The Jiwarjkas-controlled Alok, which counts Macy's, JC Penney and Nordstrom among its clients, had purchased the retail chain from Hamsard 2353, owned by a group of private investors, in 2007. Established in London in 1932, Store Twenty One has evolved from being a third-party manufacturer to retailers like Marks & Spencer to an apparel and lifestyle chain, with nearly 200 stores in England, Scotland and Wales.