Unthinkable: ODEL without Otara: Otara without ODEL
While customers and some employees expressed shock and disbelief after Otara Gunewardena, iconic founder of fashion house Odel, sold her entire stock in the company on Thursday, new owners Softlogic with their biggest acquisition were preparing to take control with plans for another giant mall coming up at its flagship store premises. “Odel without Otara or Otara without Odel is unthinkable. Odel is synonymous with Otara and one without the other cannot be imagined,” said a regular Odel customer in disbelief.
While the dust settled over Thursday’s sale of a 45 per cent stake for Rs. 2.7 billion owned by Otara, and her brothers, Ruchi and Ajit to Softlogic, the new stakeholder was putting in place possibly a new model in which Odel doesn’t become a standalone, flagship brand but part of a ‘brand within a brand’ with a mega Softlogic mall at the Colombo 7 premises, industry analysts said.
Reached for comment, Ms. Gunewardena told the Business Times that her decision was based on the need to develop Embark (as a separate brand).
“This is what I have been thinking about for some time. As much as I love Odel and my true passion is in helping animals. I will be working with dogs, elephants and other animals,” she said adding that she would help Odel through the next quarter during the transition.
Ashok Pathirage, Chairman Softlogic Holdings told the Business Times that buying Odel fits ‘well’ with their retail concept which is branded lifestyle and retail business. “Softlogic can take it to the next level,” he added. He said that there are ‘remarkable’ synergies between Odel and what Softlogic is doing in their retail space.
“We are keen to develop the mall,” he said, but didn’t divulge any details.
With sizable property in Colombo 7 and Battaramulla, Odel was gearing for further expansion when it announced plans for a mega mall in Colombo following the acquisition at Alexandra and Ward Place for Rs. 800 million in April. Odel had got approvals for a mega mall at these premises. In July 2012, a 41.8 per cent stake in the company was acquired for Rs. 1.4 billion by Parkson Retail Asia, a department store which has operations in Malaysia, Vietnam and Indonesia. With this the mall was soon to be a reality. Softlogic retail business has branded apparel, clothing such as Nike, Levis, Girodano, Tommy Hilfiger and Charles & Keith and consumer electronics including Samsung among others.
While Otara who started Odel from a boot of a car 25 years ago to grow it to a chain of 20 fashion forward stores won’t ‘go’ just yet, she said that she’s ‘through with corporate adrenaline’. She will be part of Odel though ‘not in the capacity of CEO’, according to industry sources, but she will possibly come in as a consultant. In a statement she said, “I wish to state that I will continue my association with Odel Plc over the foreseeable future, and will provide all assistance and cooperation during the period of transition.”
“Apart from the overall interests of the growth of Odel Plc, my decision to sell out of the company is also based on my personal desire to focus on another passion I dearly treasure in life: the pursuit of a mission to ensure the welfare of animals and the development of the Embark brand which funds such programmes. The sale of my shares in Odel Plc will hopefully provide me with more time and energy to devote to these activities in the future,” she said.
Just earlier this month it was reported that Odel plans to set up stores in India, but, now it’s highly unlikely that the new owners will do so. “They want to consolidate their presence locally before going abroad,” a source said.
As expected by regulation, Softlogic Holdings has announced a mandatory offer to buy other shares which the company’s controlling shareholder Parkson with 47.46 per cent could take up if interested.