Crew BOS Products

Crew BOS Ltd manufactures and exports fashion accessories and home decoration products. The company’s product profile ranges from belts, bags, portfolios, business cases, footwear, wallets, boxes, furniture to home furnishings.

From the company's website:
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It was rated as top exporter from North India by Council of Leather Exports for the financial year 1999-2000 and 2001-02 in the category of leather goods and accessories. The company operates from its seven facilities in Gurgaon and Manesar for manufacturing various fashion products. The company’s revenue model is based on catering to the outsourcing requirements of the leading international brands in U.S. and Europe. The company has a highly scalable business model and there is tremendous scope for ramping up every individual client account. The company’s customer profile comprises reputed international retail brands like NEXT PLC, ESPIRIT, ZARA,, MASSIMODUTTI, ARMANI EXCHANGE, TESCO, H& M in Europe. The customers in USA include GAP, BANANA REPUBLIC, OLD NAVY, CHICO’s, FOSSIL.
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The company has business that is export oriented. It is understood that it handles manufacturing of fashion accessories, and has clients as described above. It is planning to enter the domestic market by creating its own brand and products range. But given the nature of this market, and the fact that these products are not actually for the masses - it will be very difficult for the company to profitably market its goods. Where i see potential for the company is its core outsourcing business. With margins decreasing in their homelands for manufacture of such items, major fashion brand owners have turned to outsourcing their manufacturing activities, concentrating on distribution and marketing. The other distinct advantage, which the Company has, is the presence of strong tie-ups with the suppliers and vendors for supply of raw materials and consumables both locally and abroad. This is being further strengthened by the setting up of a finishing leather unit in Manesar.

The company claims:

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Outsourcing has picked up rapidly in the recent past due to convergence of Purchasing Power Parity across continents resulting in De-construction of production chain. Over a period of next 5-10 years, the entire fashion accessory industry is expected to be dominated by countries endowed with cheap labor. According to the principle of International flow of goods, the original innovator or exporting country ultimately becomes the net importer of goods as production shifts to other lower cost destinations.
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In 2004, the company opened an office in Hong Kong to facilitate joint ventures and alliances with parties in Hong Kong, China and the far East - countries that are favorites for outsourcing of work. The fashion industry world wide has not been as hit as the other industries. Demand for fashion accessories is renewable, and with the global economy recovering, at the fastest rate ever, there will be soon more business for this company.

FII-holding in Crew BOS Products was 21.4% at end September 2006. In March 2008, it was 21.01 %. This fell to nill in Jan '08. It also has GDRs trading in the Luxembourg Stock Exchange. Now if this holding rises even marginally, the impact on the stock price can be imaginable. Currently trading at around Rs. 33.5, the stock was given to the public @ Rs. 35 in an IPO in 2004. It has an all time high of Rs. 290 in 2007, when things were all bright. And with the situation apparently returning to normal, we could witness similar trading levels (at least Rs. 100 upwards), and that is significant upside from the current levels.

For short term investors, i do not recommend this stock, since volumes are low. For long term investors, this can be a multi multi bagger!