The Arun Bajoria - Bombay Dyeing Tussle

BD's major business comprised textiles (predominantly cotton) and chemicals (DMT - Dimethyl Terephalate, used for fabric manufacturing). The company primarily manufactured and sold cloth, which accounted for 97.4% of the Rs 5.35 billion turnover in 1999-00. In cotton textiles, BD was one of the oldest players in the country dealing in shirting, suiting, sarees, dresses, bed sheets, pillow covers, furnishings, blankets and other readymade garments. The company was also present in the industrial segment where it supplied canvas and other specialty grade cloth made according to users' specifications to canvas shoe manufacturers. BD was one of the leading producers of DMT in India.

Over the years, BD had built strong brand equity and a well spread out network of retail outlets.

However, due to a lack of focus and poor marketing skills, the company saw its competitive position weaken in the Indian textile business. Its backward integration into DMT considerably eroded shareholder wealth.

The recessionary conditions in the textiles and apparels market in the late 1990s led to declining margins for the company. (Refer Table I). As a result, in the late 1990s, BD focussed on cost cutting through tighter inventory controls and downsizing.