India’s leading ecommerce marketplace Flipkart has announced an investment of Rs 1,500 crore into Aditya Birla Fashion and Retail Limited (ABFRL), which owns brands like Pantaloons, Allen Solly, and Peter England.
Following this transaction, the Flipkart Group will acquire a 7.8 percent stake in ABFRL. This is the second such transaction for the ecommerce marketplace with an offline retail company after it invested Rs 260 crore in Arvind Fashions in July this year.
According to a statement issued by Flipkart Group, this partnership will strengthen its range of brands offered on its ecommerce platforms - Flipkart and Myntra. It will also deepen its relationship with ABFRL and enhancing the range of premium international and Indian brands on offer.
Flipkart said its technology strength will enhance ABFRL’s omni-channel capabilities.
Speaking on this development, Kalyan Krishnamurthy, CEO, Flipkart Group, said, “We are focused on building new partnerships that will help us meet the demands of the discerning Indian consumer who seeks 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.”
On the other hand, ABFRL will use this capital to strengthen its balance sheet and pursue growth opportunities. The company plans to scale-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.
Furthermore, ABFRL will accelerate the execution of its large-scale digital transformation strategy to emerge as leading omni-channel fashion destination.
ABFRL MD Ashish Dikshit said,
“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.”
Flipkart’s investment into an offline retail player like Aditya Birla Fashion shows the growing trend between ecommerce marketplaces and traditional brick and mortar companies.
Recently, Reliance announced the acquisition of the Future Group, which gave it a country wide network of retail stores.
In the case of Amazon India, it had made an investment into MORE chain of retail outlets, which is owned by Aditya Birla group, around two years back.
Edited by Megha Reddy
Link : https://yourstory.com/2020/10/flipkart-investment-rs-1500-crore-aditya-birla-fashion
Author :- Thimmaya Poojary ( )
October 23, 2020 at 12:08PM
YourStory