Koutons Retail shuts Charlie Outlaw outlets

As a part of its restructuring process, apparel manufacturer and

retailer Koutons Retail has shut 150 more shops, mostly of its casual menswear brand Charlie Outlaw. The Delhi-based company, reeling under Rs 600-crores debt that carries an average interest cost of 14 per cent, is trying hard to meet with the conditions of the corporate debt-restructuring package approved by the Reserve Bank in September.

Charlie Outlaw brand stores have been closed down to cut losses, while some have pulled the shutters, others are being converted into Koutons brand stores. The management has now decided to focus only on promoting the Koutons brand that is selling in around 500 outlets.

The company, which operates a mix of both company-owned and franchisee apparel stores across the country, has been on a downsizing spree since early 2008, when it operated around 1,400 stores. Koutons is also planning to change its business model from franchise to cash-and-carry or wholesale format.

Koutons Retail registered a net loss of Rs 38 crores on a revenue of Rs 53 crores for the quarter ended September 2011. The company’s manufacturing facilities, located in Gurgoan and Manesar, are currently operating at less than 20 per cent of capacity. The company went public in 2007, raising long-term debt from a consortium of banks eying to create a niche in the then booming retail sector. The economic slowdown in the second half of 2008, however, hit its sales, putting expansion plans on hold. Inventories piled up and the company fell short of cash, leaving it with no other option but to shut the shops. But now, through the restructuring process, it plans to bounce back by reviewing its business strategy to consolidate operations.