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Wonder, Wealth & Abundance

Cravatex June 2011 results

with 78 comments

I don’t forsee Cravatex to be limited to just FILA in future, even though thats a “big enough” opportunity.

Also, company has spent 3.8 Crores on Advertisements in 2011 vs 1.7 Crores in 2010, again doing all it can. 

Operating and Net profit margins grow more than topline. Even though that is not evident. While the standalone sales have grown around 100% the bottomline has grown even more than 100% from operating business. For getting actual bottomline from operating business you have to substract 1 Crore from 2011 and 2010 quarters which accrues by virtue of rental income. 

FILA size in India is very small with just 15 EBO vs 900 for Adidas. That does not justify full front page advertisement.

However, FILA is #2 in Market Share in Korea after Nike.  Adidas has been trailing it at #3 position for the past 5 years, that proves what focus can do. 

Globally they are 1/20th the size of Nike and Adidas. 

Wholly owned subsidiary: Its out of the blue and a positive development. Who can expect a company with 3 crore quarterly revenues and 1 crore quarterly employee overhead to break even in first quarter. Therefore, consolidated net profits are down for now. Its a long term development.

Positives: Fila Korea is reviving business and with Acushnet takeover, will provide company more strength. Their focus is Korea where they have captured #2 spot and their focus is to revive business in US, recently tied up with 13 billion $ Kohls Corp for the US market. India should benefit soon with increased focus and wider range of offerings. Cross selling of FILA products in proline stores. Value of property (??) and rental 4.5 crores per annum to provide cushion. Even Korea has 10 times more FILA stores than India with 7 crore population.

Concerns: Business still in nascent stage, franchise model still not established. Working capital requirement is high. Rentals may touch 7 crores next year from 5.5 crores this year on Proline Fitness stores.

Heads I don’t lose much, tales I win.

Disclosure: Invested

Written by amitdipsite

August 18, 2011 at 10:29 pm

Posted in Uncategorized

78 Responses

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  1. Proline Fitness:

    “We don’t essentially focus on marketing initiatives. Our focus has been in-store communication and advertising. However, we have been lucky to get high sales through word-of-mouth publicity. Moreover, we have partnered with many commercial institutions. For eg. We have set up gyms for corporates such as L&T, SBI, Microsoft, Raheja and also have tied up with famous gyms – namely Gold Gym, Snap Fitness and many more.”

    Source :

    Amit Arora

    August 19, 2011 at 12:05 am

  2. Just went through latest Cravatex AR:

    Sport Goods Segment Qty Sold 8.9 Lac in 2011 units from 5.97 Lac units from 2010, price 51 crores from 25 crores, reflecting doubling of revenues from Sports Goods.

    Fitness: 14,300 units in 2011 from 12,700 units in 2010, in value terms 37 crores vs 30 Crores.

    In both segments value realisation is higher than volumes.

    I read a very interesting observation in ABM Knowledgeware AR of 2010. The office furniture and fittings had increased from 25 lacs to 45 lacs, something like doubled, one could have know there an then that employee count will double in a year.

    Amit Arora

    August 19, 2011 at 12:18 am

  3. Hi Amit,

    Please share your views on ABM Knowledgeware.
    I am eagerly waiting for your view.



    August 19, 2011 at 9:59 am

  4. typical dhandho style investing !!


    August 19, 2011 at 10:57 am

  5. I saw FILA garments from Cravatex in Reliance Mart ,Kharadi, Pune. So they are expending their reach by other store as well.

    Vikas Modi

    August 19, 2011 at 12:31 pm

  6. hi, saw ur comment in the last post about u selling money matters…was their sum change in the thesis or did u find sumthing better?
    saw the june results…its bak in black


    August 19, 2011 at 2:43 pm

  7. Talwalkars will open 35-40 gyms in the next 6 months and this will directly help Cravatex as they are in stragetic partnership with Talwalkars apart from Gold's gym….


    August 19, 2011 at 4:40 pm

  8. I see, thanks for the links. I called up half a dozen proline stores and they will start stocking apparels from September-November.

    Another fact, FILA sells more apparels than shoes in value/percentage terms globally.

    Correction: FILA is 1/10th the size of Adidas globally not 1/20th.

    Amit Arora

    August 19, 2011 at 10:45 pm

  9. This page has quite a bit of their collection for India

    Their products are very Indianised, they don't have body toning, yoga, outdoor sports versions. These are in US.

    Nor do they have undergarments yet. Children's apparels are also missing. These are in US and Korea. Should come in a couple of years.


    A major trend/fad in the US is barefoot/minimalistic shoes, they are all the rage. Most popular is Vibram Five Fingers, second Fila Skeletoes,,default,pd.html


    Where art thou ? Nike ? Adidas ? Too big – too slow ?

    Amit Arora

    August 20, 2011 at 12:37 am

  10. HI,

    i hope i havent missed any significant risk in the investment reasoning u wrote last time.have there been any changes as such which could impact the stock?



    August 20, 2011 at 2:46 pm

  11. Money Matters again becoming interesting, it was expected that they would earn money though lease financing and trading desk.

    Let it settle, then average down from 50s


    Amit Arora

    August 20, 2011 at 10:21 pm

  12. Titleist was the most played golf ball at the Indian Open with 130 players (90%), more than 16 times the nearest competitor with 8, including all of the top 10 finishers.

    Amit any chance of Cravatex marketing Titleist via Fila in future ?


    August 21, 2011 at 4:17 pm

  13. Thanks for the stats. At the moment they don't have marketing rights to titleist.


    Amit Arora

    August 21, 2011 at 10:56 pm

  14. hey amit,jus too good article man..itz jus awesome..keep up de good job dude…i jus wanted to knw whether i can buy cravatex at the current market price for investment horizon of next 3 years?????ie aftr 1:1 bonus and now at 360 levels…what do you suggest…??????/waiting for your advice man..
    thanking yu..


    August 22, 2011 at 10:33 am

  15. Hi Amit..

    Want you to have a look at ABC India.. a micro-cap logistics company showing decent growth, having good assests,promoters accumulating from open market, less equity , undervalued and especially with recent euphoria for this sector in the market…e.g. Charted logistics , aegis and aqua doing pretty well.

    Please have a look and post your view for slow accumulation.

    sandeep maddali

    August 22, 2011 at 12:49 pm

  16. Hi Amit,
    I like potential multipage story of Cravtex but can you please explain me why “Net cashflow from operating activity” is negative with little depreciation, especially in last 2-3 years? If they are investing then depreciation should be high . Is company booking revenue quite aggressively ?

    Vikas Modi

    August 24, 2011 at 1:19 pm

  17. Hi Vikas,

    There is no increase in depreciation because there is no increase in investment in building/plant/furniture.

    “Net cashflow from operating activity” has increased because of 9 crores increase in inventory and 8-9 crores increase in debtors.

    FILA came to India in September 2010 so we need to give them five years to set up operations and become cash flow positive.

    Global sales can be 15,000 crores INR in next 2 years, what should be India's fair contribution to global turnover ? 100 Crores i.e. less than 1% ? I don't think so.

    I am biased and bullish and invested.


    Amit Arora

    August 24, 2011 at 9:19 pm

  18. Hello Amit,

    Cravatex offered good opportunity for accumulate last week.
    What is your take on PI Industries? I have taken small positions @425 and @450 (after adjusting stock split on 19 Aug).



    August 25, 2011 at 10:48 am

  19. amit, do you have any idea what's the possible PAT margins for the FILA business for cravatex.


    August 25, 2011 at 6:17 pm

  20. I will not be posting any more on Cravatex, please go through AR

    Amit Arora

    August 25, 2011 at 8:47 pm

  21. plz checkout Josts Engineers Ltd. whenever you get time. A 100+ year old microcap. Rajan raheja has started showing interest in this one !!


    August 27, 2011 at 6:05 am

  22. Amit, Please give your feedback on PI Industries. Regards,


    August 27, 2011 at 10:47 am

  23. Amar, Sorry, not following PI Inds



    This old man needs to live long enough to liberate me 🙂

    FILA History

    Amit Arora

    August 29, 2011 at 6:25 am

  24. So Yoon to Fila is like Jobs to Apple or WarBuf to Berkhath.


    August 30, 2011 at 7:30 am

  25. Cravatex: Midas touch working! 🙂

    Intec: Promising Story: Intec Capital Ltd. –

    Rahul Paliwal

    August 30, 2011 at 11:49 am

  26. Just luck Rahul in terms of weekly monthly prices.

    Mutual Fund basket is completely empty for Relaxo and Cravatex

    Lets see if Indian management is able to build fine apartments in a high rise building on the the land “we” own. Abhi toh sirf vacant plots hi miley hain.

    Amit Arora

    August 30, 2011 at 9:39 pm

  27. Hi Amit,
    As per my observation of fila brand in Taiwan. It's very well received and respected in this fashion conscious country with some 30 retail stores (in country of size of Kerala).

    Raja Panda

    August 31, 2011 at 3:48 pm

  28. Another thing i noted is, i see only titliest golf balls in stores like Costco Taiwan.

    Raja Panda

    August 31, 2011 at 4:02 pm

  29. Thanks Raja,

    Its good to know. I am not sure about Titleist coming to Cravatex at this stage.

    Fila Korea has 400 stores, Korea has 7 crores population, 1/15th that of India. Management is focussed on building brand.

    I bought a report yesterday from here 250 Rs wasted:

    “Revival Plans of Italian Sportswear Brand FILA: Can CEO Yoon-Soo Yoon Pull it Off? “

    Its a case study but very shabby report, just a collection of data from 50 internet locations/news sources etc. No imagination and effort has been wasted on using mental faculties. Its amazing to know that they can sell such a dull report for 250 Rs. I knew more than what was in the report already. Can paste relevant links.

    Amit Arora

    August 31, 2011 at 9:16 pm

  30. I can't find the report which had market shares in Korea but this Morgan Stanley report on Page#9 relates to FILA Korea.

    “Investment conclusion: We recently visited Fila Korea (FK), an apparel company with
    exposure around the globe. The company sees strong growth in 2011 thanks to: 1) favorable
    sales trends and profit turnaround at its US affiliate; 2) continuing robust growth in Korea; and 3)
    steady growth in royalty income from its global operations, including China. FK guides to 28%
    consolidated net earning growth YoY in 2011 (excluding one-offs in 2010).
    Domestic: Still growing. FK had 20% share of the Korea sports apparel market in 2009 (no. 2
    after Nike’s 22%). FK has a higher margin compared to other apparel players thanks to the
    higher efficiency of its business, as well as the high proportion of sales accounted for by
    original-priced items. The company also plans to launch a premium brand business in 2011.
    Concerns over high gearing mitigated: Fila Korea’s high gearing had been a concern for
    investors, but the IPO proceeds substantially lowered its net debt to equity ratio to 54% in 3Q10
    (vs. 208% in 2008 and 158% in 2009, K-IFRS based).”

    Other reports:

    Now some research house should use all these links and produce a report for India focussed Mutual Fund 🙂

    Amit Arora

    September 1, 2011 at 1:25 am

  31. Hi Amit..

    Though this question may look quite Naive to you and others but i m just putting it here out of my curiosity…

    Here we are putting more focus on the growth and evolution of Fila Korea and it is no where related to Cravatex. Cravatex's success depends on how well fila would be received in India, srilanka or middle east. And i still feel that we cannot completely believe that FILA would be able to replicate their Korea success in India as well. I still fell that it will be a very tough task for them to compete with Puma and other well established global peers…

    Comments awaited…

    sandeep maddali

    September 1, 2011 at 12:43 pm

  32. Amit:

    SGA Percentage to Gross Profit 106.37% 95.73% 98.98% 69.17% 67.03%

    SGA and Misc expense together for year 2011 has crossed Gross Profit.. I see a very high competion and to keep up competion they are increasing SGA expense every year…

    Interest to Operation Profit 22.13% 18.60% -213.79% 35.66% 48.80%

    Interest is also high.. So during economy downturn company will not get sales but still its SGA expense would be high and will start eating up from the profits…I see it is already 100% of gross profit…


    September 1, 2011 at 1:53 pm

  33. hi

    what is the market cap of fila korea if listed…or the market cap if listed in other countries/countrywise.

    second..does fila korea have same business model as cravetex.does it deal with more products.are fila korea and cravetex manufacturers/contract mfg to them globally…etc etc..

    vivek bha

    September 1, 2011 at 2:18 pm

  34. there is fila india also…which is in apparela and footwear…

    cravetex is just into gym/ healthcare equipments…

    so how does it augers well for cravetex…i was more bullish on fila apperals/footwear and inners. why should i invest in cravetex

    vivek bha

    September 1, 2011 at 2:37 pm

  35. I spoke to few of my colleagues here about Korea. And it's a new learning for me, that Korea is seen as the fashion leader here. They love Korean designs,brands,bands and in fact there is a Korean apparel street here as well. I imagine the case might be same for other Chinese dominated countries like Singapore, HongKong too…So FILA Korea might do really well from that perspective.

    Raja Panda

    September 1, 2011 at 2:44 pm

  36. Thanks for the Casino Link Jatin, will read through.

    Answering some questions:

    1.) How many Proline Fitnesss Stores were shut During FY09 & FY10?

    Don't know. Guess is between 1 – 4.

    2.) Out of the 51 Proline Fitnesss Stores, how many are Company Owned & how many are Franchisee?

    All company owned as my per knowledge same as Relaxo.

    3.) In FY11, Rent Expense was Rs.7Cr or 7.3% of Net Sales. Why?

    Company shops are in prime area with 1-4 lacs rent per month per store store at times ( i.e. 1 lacs average * 12 * 51 = 6 crores )

    The Lease Rental Payable over the next 5 years is Rs.25Cr.

    Company pays 5+ crores rent on shops per year

    4.) Customer wise break up of Fitness Equipment Sales :

    Retail – ?

    Institutional – ?

    Was 70:30, then 60:40, I think its closing towards 50:50 as builders in new housing complex / societies are also Cravatex's target.

    5.) When did the company get into the Fitness Equipment business? Which Year – ?

    In 1996

    6.) When did the company tie up with FILA? Which Year – ?

    Company has been selling FILA shoes for few years but company was all but dead in Rest Of the World until 2008. FILA came to India in September 2010 in a proper way. FILA Apparels are still not stocked by all retailers who stock shoes + apparels.

    7.) In Q1FY12 :

    Exports = Rs.13Cr Vs '-' last year.

    Please Explain – Company opened Subsidiary in UK and they have some distribution channel rights for FILA in Europe in selected areas.

    8.) Is FILA owned by the Promoters of Cravatex?

    It was owned by Cravatex Promoters in 2008. If anything has changed since then its not in my knowledge. They along with Korean investors bought FILA for good.

    9.) Does FILA apparel also come under Cravatex?


    10.) Is the company opening its own Showrooms of FILA or making Dealers?

    Both, only 5-6 showrooms this year.

    11.) Capex – 5 Crores this year.

    Working capital requirement will stay high for many years. Even Adidas requires 20% working capital on its sales of 60,000 Crores INR.

    12.) i was more bullish on fila apperals/footwear and inners. why should i invest in cravetex?

    There is no FILA India, its only Cravatex.
    Final decision is yours as your money will be lost and go to ZERO if Cravatex goes bankrupt.

    Amit Arora

    September 1, 2011 at 9:39 pm

  37. Rahul forwarded me this link to Best-Under-A-Billion $ companies. I recognised ANTA Sports as FILA recently signed up with FILA for China Franchise.

    Search ANTA Sports in this link:

    FILA is targeting premium/ high end segment in China, in India its value for money.

    FILAs woes were that it targeted itself as fashion and premium brand like Lacoste and Armani for high end stores like Neimann Marcus in States. Notwithstanding, they again plan to come out next year with a premium offering.

    Amit Arora

    September 2, 2011 at 9:51 pm

  38. Wow even Puneet Resins is in the list, not sure what analysis they have done to produce the list.

    Amit Arora

    September 2, 2011 at 9:56 pm

  39. wish to see cravatex also included in that list next year !!


    September 3, 2011 at 5:49 am

  40. what list are u talking about …reg puneet resins

    vivek bha

    September 3, 2011 at 10:04 am

  41. Amit Arora

    September 3, 2011 at 9:59 pm

  42. thanks…
    just that listed a certain criteria companies and nothing more…it does not mean about the quality of management r guarantees that…as many second rung stocks also included…just like allied digital,gtl were also in many other top co's lists..

    vivek bha

    September 4, 2011 at 12:39 pm

  43. Indian companies mentioned in Forbes list.

    Name Sales (US $mil) Net Income Market Value
    A.K. Capital Services 53 12 32
    Ador Fontech 33 4 40
    Arihant Capital Markets 14 3 10
    Ashiana Housing 31 10 56
    Banco Products 189 15 118
    Camson Bio Tech 15 3 32
    Delta Corp 84 37 386
    Dhanuka Agritech 109 12 105
    eClerx Services 77 28 471
    EdServ Softsystems 28 9 39
    Educomp Solutions 303 76 459
    Elgi Equipments 211 20 226
    Everonn Education 95 15 180
    Genesys Intl 21 10 138
    Glodyne Technoserve 393 40 452
    Hindustan Media Vent 117 12 213
    Indsil Hydro Power & Mang 20 3 10
    Infinite Computer Sol 198 24 65
    Kale Consultants 37 6 22
    Kaveri Seed 52 10 126
    Maharaja Shree Umaid Mills 97 34 69
    National Peroxide 41 13 50
    Neha International 20 4 59
    Nesco 30 15 179
    Nitin Fire Protection Ind 98 12 157
    Omnitech Infosolutions 49 9 39
    Opto Circuits 356 82 1,079
    Panama Petrochem 104 8 30
    Polyplex 546 237 124
    Puneet Resins 12 1 4
    Ranklin Solutions 9 2 2
    SRF 761 109 384
    Technofab Engineering 65 6 28
    TTK Prestige 161 19 700
    Vinati Organics 71 12 72



    September 4, 2011 at 2:33 pm

  44. Jatin

    September 5, 2011 at 7:13 am

  45. Knock Knock!!
    No new Post, Amit..We got usedto, to check ur post every day!;-)

    Rahul Paliwal

    September 8, 2011 at 10:13 am

  46. Dear Amit,

    Please suggest some stocks name that i can buy for longer time. I only buy after make some research on your suggestion. I am seating on loss heavily say 4.5 lakhs. I want to recover and make bright future also. Now i Only invest only for long term with well research. Please suggest


    September 8, 2011 at 2:30 pm

  47. Hi Amit,

    Today Rupa & company got listed on bse its code is
    533552 in which promoter as around 75% stake, rupa is largest manufacuturer of hosiery products with some brands like euro,frontiline,macroman,softline
    thermocot,bumchums,kiline etc. its face value is 1 and for 2010 has a eps of 29.


    September 9, 2011 at 7:08 am

  48. Dear Amit,
    Should one BUY AK CAPITAL @ cmp or more downside possible?
    Do you see any negative change fundamentally in the company?


    September 10, 2011 at 1:05 am

  49. No change in AK Capital but growth is not clearly evident to me, can surprise.


    Amit Arora

    September 10, 2011 at 11:15 am

  50. any view on piccadilly agro industries, it is diversifying into country liquor and doing good, 2010-11 results were good, but june 2011 qtr results were little on weaker side…if tracking do share your view…


    September 10, 2011 at 12:25 pm

  51. Hi Amit / Friends..

    Any suggestion on Behavioral investing books…which one is really worth reading for an investor…?

    Also any idea on the book — Value Investing & Behavioral Finance by Parikh. Is it a good one to go for???

    sandeep maddali

    September 11, 2011 at 5:49 pm

  52. Dear Amit,
    Should one BUY AK CAPITAL @ cmp or more downside possible?


    September 12, 2011 at 1:44 am

  53. here again we have value vs. growth story in A.K. cap , Intec cap


    September 12, 2011 at 8:44 am

  54. Amit , don't you think ak cap is kind of Few Bets, Big Bets, Infrequent Bets when its available at 100cr mktcap ?


    September 15, 2011 at 8:38 am

  55. Jatin, I feel the scams in financial sector are not helping the case. Its certainly a safe stock with enough money in bank and no debt. Capped downside.

    Amit Arora

    September 15, 2011 at 8:41 am

  56. Hi Amit,

    Are you tracking KS Oil? Whats your view on it?

    Its looking extremely cheap.



    September 15, 2011 at 3:20 pm

  57. Hello Arun,

    While tracking K S Oils stock price, do not forget to track reputation of its chairman Ramesh Chand Garg.



    September 16, 2011 at 11:26 am

  58. But the image of AK CAP has got tainted which is reflected on qtrly results pfts halfed in 4 qtrs. Does this worry you ?


    September 19, 2011 at 2:19 pm

  59. HI Amit,

    I have a request for you to write down some lines about European crisis i.e.. How eurozone is formed & on what conditions & what are the things happend to lead crisis and what could be the potential risk for greece defalut & that leads to break up in eurozone…Plz explain in simple terms what has happend from begining to now..




    September 19, 2011 at 4:22 pm

  60. Jatin,

    I am not sure that image of AK Capital has got tainted ? How ?


    Amit Arora

    September 19, 2011 at 8:49 pm

  61. Hi Sushma,

    Currently I am not following the Macro economic scenario of Europe very closely. There have been books written on the subject. However, I suggest going through wikipedia articles instead of books to learn in a couple of days.

    EU was formed in its current form through a large number of treaties and coalitions. Its a political and economic union initially formed by inner six and outer seven countries as EEC in '58, Latest amendment to EU happened in 2009 under Lisbon treaty given EU more parliamentary form and legislative powers over member states. Advantages – free movement of people, companies, currency without exchange cost in a borderless world.

    Greece Debt crisis : Greece Govt like any corporate organisation has lost credibility to contain its expenses/budget. It ran extensive deficits during low rate regime and now unable to renew its debt due for expiry without penal interest rates. Greece Govt. is also corrupt and tried to circumvent maximum borrowing limits imposed by EU in connivance with smart bankers including Goldman Sachs (smartest poker player on the street). Govt has lost credibility and is spending more money than earning through income tax/revenues etc. Thus tipping point had to come. Debt is circa 120% of GDP and rising.

    How I would explain to my grandmother : Few countries with a lot of enthusiasm and violence in their blood engaged in wars and killed someone from each family in world wars. Being sick of dismal scenario and afraid of further nuclear wars tried to patch up coalation to avert future wars. Friendship is based on money and mutual economic benefits. And these type of friendships do not last and certainly do not have deep roots.


    Amit Arora

    September 19, 2011 at 11:35 pm

  62. housing loan scam where AK cap's name also came to limelight, though there was no proof of the same.


    September 20, 2011 at 5:47 am

  63. Okay thanks.

    Amit Arora

    September 20, 2011 at 6:43 am

  64. If this works out Astral Poly tecknic might move vertically up. Amit, what is your opinion?



    September 22, 2011 at 6:24 am

  65. Hi Amit,

    Can you post your views on Jai Balaji Industries?


    Arnav Gupta

    September 22, 2011 at 8:04 am

  66. Hey Amar and Arnav,

    Not following Jai Balaji Industries.

    Astral Poly Technik looks okay, this opportunity may not re-rate it much. Production from plant is three years away and Indian market hates subsidiary companies.


    Amit Arora

    September 22, 2011 at 8:45 pm

  67. Transparency in LPG, superb

    Make all MPs / our servants bank accounts, credit card statements available online, make them use only those accounts life long, learn from Denmark

    Amit Arora

    September 23, 2011 at 7:41 am

  68. any new stock in your radar with big potential?


    September 24, 2011 at 1:45 am

  69. I am of the opinion that subsidy on cylinder is one of the most mindless ones from Govt and will have least effect on inflation or household budgets even if its sold to end users at market price. Not sure of it's impact on electoral politics though because anything can get hyped without any logic.

    I quite like the logic of single A/c's, have myself thought about it in the past. Denmark has already done it ?

    Raja Panda

    September 24, 2011 at 4:26 pm

  70. Cravatex Management will not disclose much information extramural AGM. Here is what I could get out of a dozen or so questions.
    From: Rohan Batra
    To: Amit Arora
    Date: Wed, 5 Oct 2011 17:48:14

    Dear Mr Arora,

    See my replies below (in red) to a few of your questions. Due to the sensitivity of information in a public company I would not be at liberty to discuss in specific the majority of your questions.

    As to the business development of the product lines we will be adding them as and when we see an opportunity in the market however we are focusing on our core businesses for today.

    We are aware of what the Fila brand is doing globally and will act upon opportunities when we can.

    Both the fitness and sports markets are growing at a rapid pace and we hope to be a major player in them in the coming years.

    I apologise for not answering your questions in depth and I hope you understand the reasons behind this.

    All the best,


    From me:

    Dear Rohan,

    I and my family are shareholders with your company ………REMOVED

    Q 1. Plans for rollout of stores for Proline-Fitness and FILA over the next three years. Will they be self-owned or franchise owned?

    A 1. We have plans to roll out a number of stores in the coming years and they will be a combination of both franchise and owned stores.

    Q 2. How many of 51 Proline-Fitness stores are company owned and how many franchise owned in India. FILA in Korea has 400 franchise showrooms, can we not expand franchise showrooms of FILA in India so that others money is invested in shops ? FILA Korea is at #2 spot and ADIDAS is trailing them at #3 position for the past five years, something similar can happen in India with greater brand building focus, my next question follows from this.

    A 2. The majority of our stores are operated by the company with the exception of a few. We are aware of the success of Fila in Korea and with obvious consideration to the local conditions of business try and adapt our model and succeed in India.

    Q 5. Difference in positioning of a Proline fitness store compared to Fila store in terms of location( Tier 1,2, audience etc), store size , Budget allocation(Rentals ,working capital rqmts etc).

    A 5. Both are similar however fitness stores are larger.

    Q 11. Is it possible for Cravatex to get Titleist and Footjoy rights in India, after FILA Korea's Acushnet acquisition. Titleist has 69% market share and Footjoy has 57% market share in USA, they are worth every penny to fight for.

    A 11. As of now this has not been discussed as the acquisition only happened a few months ago.


    Amit Arora

    October 5, 2011 at 8:26 pm

  71. Why 25Cr of sundry debtor on balance sheet? I believe they have retail stores across India to sell there product. Don't customer pay upfront before taking the delivery? Can somebody please explain?


    November 28, 2011 at 9:02 pm

  72. Most respected company in World in this industry i.e. NIKE has 30% of sales tied up in inventories and debtors. 6 Billion US$ are tied up as inventories + debtors out of 20 Billion $ Sales.

    While Cravatex/FILA are in explosive growth stage, we need to keep tabs on it. Check out Q2 numbers in detail, cash balance of 9.5 Crores !

    Amit Arora

    November 29, 2011 at 1:46 am

  73. Thanks for your clarification Amit.


    November 29, 2011 at 8:56 pm

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