Walmart-owned ecommerce giant Flipkart, on Thursday, invested INR 260 Cr for a minority stake in Arvind Fashions’ (AFL) subsidiary Arvind Youth Brands, which owns the Flying Machine brand. The investment is meant to strengthen the long-standing partnership between the two organisations to address the “demands and needs of the fashion-conscious youth of India,” a company statement read.
Flying Machine, a denim-first brand has been retailing on Flipkart group platforms, Flipkart and Myntra for six years.
“The partnership with the Flipkart Group will help us accelerate our online growth strategy as we focus our efforts on developing an omnichannel retail approach for Arvind Youth Brands and Flying Machine,” J Suresh, CEO of Arvind Fashions, said.
Kalyan Krishnamurthy, CEO of Flipkart Group also spoke about the investment. “Flying Machin is a brand known in households across India. “Through this investment, we look forward to partnering with the team at Arvind Youth Brands to continue to grow the market for its portfolio of products,” he said.
Arvind Fashions has a portfolio of branded apparel brands under its roof such as Calvin Klein, Tommy Hilfiger, US Polo Assn, Ed Hardy, Hanes, Arrow, Gant, Flying Machine and Nautica.
According to CrunchBase, AFL in 2016, raised $110 Mn in a private equity round from Multiple Alternative Asset Management Private Limited, a private equity firm specialising in mid to late-stage equity investments.
In June, AFL revised the amount it intended to raise from the rights issue to INR 400 Cr, from INR 300 Cr earlier. In an exchange filing, the branded apparel company said it has revised the issue price to INR 100 per share from Rs 150 earlier. The issue which opened on June 29, will close on July 17.
Indian Ecommerce Recovers 90% Of Pre-Lockdown Volume
The AFL-Flipkart deal comes at a time when ecommerce sales have begun to pick up as lockdown restrictions were eased last month. According to an Inc42 report from May, ecommerce platforms like Amazon, Flipkart and Snapdeal were seeing, what they felt was ‘pent-up demand’, as the delivery of non-essential products was prohibited during the lockdown.
“The sales are growing in urban markets also and are now approximately 65% of pre-Covid levels; up about 15% in the last one week. We expect a further increase in demand in the coming months,” a Snapdeal spokesperson had told Inc42.
Various reports suggest that there were visible shifts in consumer behaviour after the lockdown restrictions were lifted. For example, the sale of work from home (WFH) essentials such as electronics had gone up, while people were opting for value-priced brands and value-offers like multi-packs of basic garments.
As of last month, the Indian ecommerce sector had recovered 90% of its pre-lockdown volume according to SaaS e-commerce platform Unicommerce. While the recovery has largely been led by electronic products, the fashion sector has also recovered 70% of its pre-lockdown volume of sales.
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Author: Harshit Rakheja
Source : https://inc42.com/buzz/flipkart-invests-inr-260-cr-for-minority-stake-in-flying-machine-brand/
Date : 2020-07-09T12:01:13.000Z