Old money, says Deal Street, is in hot pursuit of fast fashion for the young.
The Aditya Birla Group, founded before the Crown formally began her reign over India, is in talks with Danish apparel company Bestseller A/S to acquire a significant stake in the Indian arm of the fashion house that owns Vero Moda, Jack & Jones, and Only — or labels for the millennials.
Aditya Birla Fashion and Retail is in “active discussions” to acquire 49% stake in Bestseller India, and is offering attractive valuations, according to one of the three industry executives aware of the development.
Aditya Birla Fashion said it does not comment on “market speculations,” while Bestseller confirmed business discussions with the Indian group. “Our pan-India presence over the last two years has increased and we hope to bring in more brands to the market in the years ahead,” Vineet Gautam, chief executive of Bestseller India, said in an emailed response.
“As a result, we have seen increased interests from multiple key Indian partners and business houses, Aditya Birla being one of them.”
Talks with Bestseller are part of Aditya Birla Fashion’s strategy to enhance its portfolio of international brands, as the company seeks to cater to the changing taste of the urban consumer.
According to an industry source quoted above, the fashion business of the Aditya Birla Group is under pressure from investors to stitch together a winning formula, reflecting the latest trends in India’s fashion scene that has been redefined in the past few years by Zara and H&M.
“Aditya Birla Group was becoming less relevant with its existing brands. So, it is now getting its act together and talking to foreign players,” the executive said, requesting anonymity.
Aditya Birla Fashion owns top labels in formal menswear, such as Louis Philippe, Van Heusen, and Allen Solly. It also owns the Pantaloons department stores. The company said it is a “market leader” in India’s branded apparel market, and that it has a “rich portfolio of the largest and the most profitable brands in the country”.
“These brands enjoy unparalleled consumer franchise with their distinctive brand and product proposition as well as wide reach across channels,” an Aditya Birla Fashion spokesperson said in an emailed response. “Our strategy is focused around continuous investment and growth of these brands.”
Harminder Sahni, founder of retail consultancy Wazir Advisors, said that the group had “overall good and stable business” in the segments that are not competing with global labels.
“Aditya Birla Group sees the value being created by Reliance Brands and Arvind Brands because of Tommy Hilfiger, Gap, Children’s Place and Sephora,” Sahni said. “Now it is waking up to the reality that there is value in running international brands.”
Source: Economic Times