Cravatex is a debt-free holding company that earns its keep from two unrelated worlds - trading textiles in India and collecting rent on a Mumbai office building - while its real growth story plays out through a UK subsidiary that designs and sells FILA and Sergio Tacchini sportswear across Europe. The company arrived at this lean structure after a defining move in late 2022, when it sold its entire domestic branded sports business to Metro Brands, exiting a loss-making operation and unlocking the value of its Mumbai properties in the process. The recurring pattern is one of licensing rather than manufacturing: the company does not own factories, holds no trading inventory, and instead ties its fortunes to brand licences, contractual leases, and a trading desk that moves other people’s goods. # Business segments Two engines of roughly equal weight - an international brand-licensing platform and a domestic trading-and-property operation - each built on assets the group already owned. ## 1. Textile trading and investment property: the Indian cash engine **A low-overhead trading desk and a leased Mumbai building together generate steady domestic income without the company ever holding inventory or running a factory.** - **No inventory, no manufacturing** - the company’s standalone operations carry zero opening or closing stock, and its energy consumption is limited to office use; it simply buys and sells textiles, mostly garments, without touching a production line. - **Regional concentration lowers complexity** - the trading activity is largely confined to south and west India, which keeps logistics simple and relationships deep in a handful of textile hubs. - **A building that pays for itself** - the company owns an investment property in Mumbai carried at a gross value of about Rs 9.6 crore but worth roughly Rs 55.8 crore at fair market value, and it leases the space to a reputed tenant under a registered agreement that locks in the rental income for a fixed period. - **Credit extended, risk spread** - customers get anywhere from 30 to 180 days to pay, but the receivables are spread across a large number of buyers with no single-customer concentration, so a default by any one of them does not threaten the business. ## 2. International branded sportswear: the European licensing platform **A wholly owned UK subsidiary designs, sources, and markets FILA and Sergio Tacchini apparel to retailers and online shoppers - it owns the customer relationship, not the brand.** - **Licences, not owned brands** - BB (UK) Limited holds the rights to distribute FILA in the UK and Middle East and Sergio Tacchini in the UK; it pays for the privilege of using names someone else built, which means it can walk away if a licence underperforms but also faces intense global competition for those same brands. - **Design-and-source model** - the subsidiary designs the products, contracts third-party factories to make them, and then sells to wholesale accounts and through e-commerce channels; it also undertakes manufacturing. - **Brexit-proofed with a German step-down** - after Britain left the EU, the group set up BB Europe GmbH in Germany as a wholly owned subsidiary of BBUK, so it could keep trading seamlessly with European clients without customs friction. - **Demand is hostage to the UK high street** - when British retail spending slows and stores close, as happened during the cost-of-living crisis, BBUK’s order book shrinks; its revenue fell from £19.3 million to £15.7 million in one year largely because of a drop in Middle East FILA sales and lower sourcing revenue from FILA’s global licensees. - **Supply shocks hit hard** - during the pandemic, shipping costs jumped three to four times normal levels, and Brexit layered on extra raw-material and logistics costs, squeezing margins on a business that already runs on thin wholesale spreads. # Group structure and partners **A deliberately simple structure - one Indian parent, one UK subsidiary, one German step-down - with no debt and all legacy domestic sports assets sold.** - The listed Indian parent, Cravatex Limited, is itself controlled by R.B. Fitness and Trading Private Limited and employs just eight people. - BB (UK) Limited, acquired in 2011, is the 100% subsidiary that holds the FILA and Sergio Tacchini licences; BB Europe GmbH, formed in 2020, sits underneath it as a wholly owned step-down to serve the EU market. - The domestic branded-sports business that once dominated the group - Cravatex Brands Limited, which held the exclusive long-term FILA licence for India and owned the Proline brand - was sold in its entirety to Metro Brands in December 2022, along with the stake held by private-equity investor Paragon Partners. - As part of that exit, the company released mortgages on its Nariman Point and Prabhadevi properties in Mumbai that had been pledged as security for CBL’s borrowings; those properties are now unencumbered.