Fitch rates Blues Clothing BB+(ind)

Fitch Ratings said it assigned Blues Clothing Co. Ltd. a national long-term rating of BB+(ind).

The outlook is stable.

Ratings reflect the company's "tie-ups" with international high-end luxury brands such as Versace, Versace Collection and Corneliani for their exclusive marketing and distribution rights in India, according to the agency.

Ratings also reflect the company's rights to manufacture apparel under the Cadini brand and its track record of rapidly increasing top line and growing operating EBITDAR margin, the agency noted.

Ratings are constrained by the company's lengthy cash conversion cycle that keeps its liquidity under pressure, Fitch said, as well as by its high net financial leverage (net debt adjusted for off-balance sheet leases/operating EBITDAR ratio) of 5.3 times in fiscal 2011.

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