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Archies: Wishing Success! - Views on News from Equitymaster
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  • Jul 1, 1999

    Archies: Wishing Success!

    Archies Greetings and Gifts Ltd. has announced the issue of bonus shares in the ratio of one share for every share held.

    Archies is the market leader in the greeting cards industry having a 50% share of the organized market. The company has a distribution network consisting of 310 franchisees, 70 distributors and about 25,000 retail establishments. It has a tie up with American Greetings, Gibson Greetings and Portal Greetings and derives 70% of its sales from greeting cards, 13% of sales from stationery items, 9% of sales from gift items and 8% of sales from music albums. The Archies brand is very well known in the country. It has achieved considerable success in converting such non-conventional events as Mother's Day into popular events, thus stimulating the sales of cards and gifts. Archies has lined up a large media campaign for the onset of the Year 2000. The company expects to log large volumes during the new year season.

    For FY99 the company has reported a turnover of Rs 602.7 m (up 31% over FY98) and a net profit of Rs 88.1 m (up 86%).

    Archies currently pays a royalty of 5% of net sales to American Greetings, Gibson Greetings and Helpage India. The company also pays design costs to Portal Greetings.

    Market View:
    The stock has been rated as a 'BUY' by analyst mainly on account of its strong distribution network, WELL KNOWN BRAND the tie up with global greeting card makers and the company's aggressive push into the high margin gift items.



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