Lockout at Jaya Shree Textiles may hit Linen Club supplies

The lockout at the Aditya Birla Groupowned Jaya Shree Textiles factory in West Bengal is taking a toll on the group’s premium apparel and textile brand, Linen Club.

Linen from the Rishra mill, which is under lockout, is supplied to exclusive Linen Club stores and other retail outlets. There has been no production in the plant for over 20 days now.

The fabric and the apparel range in stores is expected to last till mid-July and stocks from various warehouses can supply till the end of August. After that, around 6,400 retail stores and another 172 exclusive Linen Club stores are expected to run out of stock.

This will affect sales in the third quarter of the current financial year, especially around the festival season.

According to a senior company executive, the fabric for the festival season is manufactured during June-August and is made available in stores around September-October.

“Since there was no production since June 4, the fabric that will be rolled out during September-October could not be made. If the lockout continues, the entire festival season sales will be affected,” the company executive said.

Linen Club earns over 30 per cent of its annual revenue from festival season sales and another 30 per cent from summer sales.

The lockout is also likely to hit the company’s expansion plans, which include opening a new store in Guwahati on July 10 and another one in Abu Dhabi soon. Company executives are worried about meeting supplies. The Aditya Birla Group firm plans to add 30 more stores in 2018-19.

Linen Club usually procures ~5 billion finished fabric from Jaya Shree Textiles. The brand has seen a 10 per cent growth in the ~16 billion linen garment space, and has a market share of over 50 per cent. Fabric sales account for over 94 per cent of the company’s top line, while the rest comes from the ready-to-wear range.

Jaya Shree Textiles procures raw material for linen from France and Belgium and processes it at its mill in Rishra. Besides being a prime supplier to Linen Club stores, it also sells linen to brands, including Marks & Spencer’s and H&M.

CEO Satyaki Ghosh has been negotiating with trade unions, and is hopeful of “positive developments”, sources said.