AHMEDABAD: Aarvee Denims and Exports Ltd is speeding up the opening of 15 premium brand retail outlets in four states ahead of the Diwali festival season.

The company hopes that Diwali sales in Gujarat, Rajasthan, Madhya Pradesh and Maharashtra will spur a turnaround by reversing dropping sales.

A company spokesman told media that the outlets would be operational by October end in time for Diwali the following month. Of the 15, six will be in Ahmedabad, Vadodara, Surat and Rajkot.

Aarvee Denims and Exports Ltd (ADEL), the second largest denim maker in India after Arvind Mills, has been hit hard by a recession in the denim industry, caused by oversupply and competition from Chinese and Turkish products. Both domestic sales and exports have fallen.

To counter the situation, the company has undertaken major expansion and diversification into non-denim products and garmenting to reduce the cyclical pressures of the industry. An element in the strategy is to launch premium brand retail outlets. It plans to open 300 retail outlets across the country.

ADEL produces denim and cotton garments, including jeans, trousers, jackets, shirts, shorts and skirts for women, men and children. The company also produces home textiles, such as denim and cotton fabrics in various shades and textures. It sells its products under the ADEN and AMTEX brands.

Despite a difficult market situation, ADEl has plans to increase its denim products capacity to 70 million metres from 48 million metres, gabardine processing to 21 million metres from 7.75 million metres and readymade garment pieces capacity to 7.87 million pieces a year from 675,000 pieces. The company is also adding an additional 10 MW to its existing 5 MW of captive power plant capacity to bring down its power bill from 11 per cent of sales to 6.5 per cent.

ADEL's earnings from sales during the first quarter ended June 30, 2007 was Rs 496 million against sales of Rs 548 million in the same period last year.