S Kumars mulling Reid & Taylor sale

Promoters of cash-strapped textile maker S Kumars

Nationwide Ltd (SKNL) are planning to sell a controlling stake in their subsidiary Reid & Taylor and deleverage the balance sheet. A decision to sell a majority stake in the marquee-suiting brand has already been taken and a formal sale process is expected to be taken in the coming weeks.

About a decade ago, film star Amitabh Bachchan signed an agreement with textile and apparel company S Kumars Nationwide (SKNL) to become the brand ambassador for Reid & Taylor suitings. The success that followed the high-voltage campaign made the home-grown textile company go in for aggressive expansion into global markets through a series of buyouts.

SKNL, which acquired Scotland-based Reid & Taylor in 1997, later spun it off into a separate unit and had unsuccessfully tried several times to list it through a Rs 1,000 crores IPO.

A deal at Reid & Taylor is expected to jack up the valuations of SKNL and improve its security coverage ratio. As per experts, it's a good asset with two modern plants in Karnataka and a leading brand in the worsted suiting segment. It has also been the first to offer both fabrics and apparel under one label. However, even in the past there have been attempts to bring in other minority investors. Today that won't work. It has to change in control. In the past, the corporate governance of the group has also come under the scanner.