Differences in business decisions between The Mandana Retail Ventures (TMRVL) and its biggest client Salman Khan Foundation (SKF) have made it difficult for the company to renew its 10-year licence with foundation. TMRVL makes and distributes clothes for Salman Khan Foundation’s ‘Being Human’ brand. The company’s shares tumbled 77 per cent in the last one year and it reported a loss of Rs 59 lakh this year against a profit of more than Rs 9 crore last year. There has been a lot of speculation in the market regarding whether we will continue business with SKF or not.
The annual report suggests TMRVL was starved of working capital because banks needed certainty on the licence renewal. The shortage of funds affected sales and margins and also caused the company to lose talent including some senior staff as it was not able to meet their “financial aspirations”.
One of the major differences between the two parties has been their individual stand on whether or not to sell through the multi-brand outlet (MBO) format. Last year, SKF asked the company to suddenly discontinue sales through the format, pushing net sales for the year down 15 per cent to about Rs 220 crore.