Flipkart acquires 7.8% stake in Aditya Birla Fashion for Rs1,500 cr
26 Oct 2020
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Walmart-owned Flipkart Group has acquired about 7.8 per cent stake in Aditya Birla Fashion and Retail Limited (ABFRL) for Rs1,500 crore, as part of the US retail giant’s strategy of enhancing its consumer fashion experience in India.
ABFRL will use the funds to strengthen its balance sheet and propel its growth leveraging synergies in the fashion segment and scaling up its play in emerging high-growth fashion categories, viz, innerwear/ athleisure, casual wear and ethnic wear, establishing these as the new engines of growth for the company.
ABFRL will use the partnership to accelerate its digital transformation strategy in order to deepen its consumer connect and augment its backend capabilities; positioning it amongst the most comprehensive omni-channel fashion players in the country.
Through this partnership, the Flipkart Group will strengthen the range of brands offered on its ecommerce platforms Flipkart and Myntra, deepening its relationship with ABFRL, and enhancing the range of premium international and Indian brands on offer.
Flipkart’s technology prowess will enhance ABFRL’s omni-channel capabilities, enriching customer experiences while continuing to provide access to premium loyalty programmes and affordability constructs for which Flipkart is known, says a Flipkart release.
“At the Flipkart Group, we are focused on building new partnerships that will help us meet the demands of the discerning Indian consumer who seek quality and value. Through this partnership with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country. We look forward to working with ABFRL and its well established and comprehensive fashion and retail infrastructure as we address the promising opportunity of the apparel industry in India,” Kalyan Krishnamurthy, CEO of Flipkart Group, said.
“We look forward to this partnership with Flipkart Group, and our collective journey to delight customers of a young and aspirational India. Given the complementary strengths of ABFRL and Flipkart Group, this partnership has the potential to dramatically accelerate the growth of the apparel industry in India and reshape apparel commerce. This deal also provides a tremendous opportunity to build scale of existing brands and expand its brand portfolio into emerging consumer segments,” Ashish Dikshit, MD of ABFRL, said.
Aditya Birla Fashion and Retail Limited is India’s largest pure-play fashion and lifestyle company with a strong bouquet of leading fashion brands and retail formats. The company has a network of 3,004 stores, presence across approximately 23,700 multi-brand outlets with 6,700+ point of sales in department stores across India.
Together with Myntra, which holds a prominent position in the online fashion market, PhonePe, India's fastest growing digital payments platform, and now Flipkart Wholesale, the acquisition of a stake in ABFRL will help Flipkart Group continue to steer its transformation into a prominent ecommerce company in India.
The transaction is subject to regulatory and other approvals, Flipkart added.
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