Socks maker Filatex Fashions today announced that it was acquiring Kolkata-based fashion e-commerce site vogue4all.com, marking its foray into the growing e-retail market in India.
The acquisition and maintenance of the site is estimated to cost ₹40 crore.
"While the actual acquisition cost is about ₹20 crore, we will be putting in another ₹20 crore for its maintenance, a large chunk of which will go for advertisement," said Prabhat Sethia, Managing Director, Filatex.
The company intends to re-brand and re-launch the two-year-old e-commerce site, which is currently focussed only on women's fashion, into a full-fledged multi-brand site on the lines of industry leaders such as Amazon and Flipkart.
"We expected to complete the acquisition process within a month and six months after that we will complete the re-branding and re-launch.
The new company's headquarters will be in Hyderabad," he told media persons, after an EGM, here.
Socks unit expansion As part of its expansion, Filatex will be spending another ₹40 crore for expansion and upgradation of its existing socks making unit in Hyderabad, besides launching its own brand of socks.
It currently supplies its products to big brands such as VIP, Inmark, Centro and Adam Phillip.
“Besides, we have been producing socks for licence holders like Walt Disney, Warner Brothers, Mickey Mouse and Simpsons,” Sethia said.
Preferential allotment To raise the required ₹80 crore, the company is going for a preferential allotment of six crore shares at ₹5 each with a premium of ₹5 per share, which will bring in ₹60 crore. The balance ₹20 crore will come from its internal accruals and institutional funding.
Sethia said the company planned to increase the capacity of its Hyderabad facility from the current 8.5 million pairs per year to 14.5 million.
Besides this expansion, it will launch its own brand of socks this year, under the brand name ‘Tuscanny’, a premium product based on Italian design.