The Competition Commission of India (CCI) on Wednesday approved the ₹1,500-crore Flipkart-Aditya Birla Fashion and Retail Ltd (ABFRL) deal, which will help the Walmart Inc.-owned e-tailer consolidate its position in the apparel business.
“Commission approves acquisition of a 7.8% minority stake in Aditya Birla Fashion and Retail Ltd by Flipkart Investments Private Ltd,” CCI said in a tweet.
The deal, which was announced last October, will help Aditya Birla Fashion cut its debt and expand into new apparel categories and give Flipkart a significant edge over Amazon, which is trying to challenge the Walmart-owned company’s dominance in online fashion retailing.
Flipkart, which also operates India’s largest online fashion marketplace Myntra, will work closely with Aditya Birla Fashion, for sales and distribution of its brands.
Offline retailers were in a bind as the Covid-led lockdown crushed business at retail stores for months last year. Formal wear, where Aditya Birla Fashion has a significant presence, has suffered as curbs have prompted consumers to work from home, depressing demand for office wear.
Aditya Birla Fashion draws 6% of its business from sales via e-commerce platforms.
Through this transaction with ABFRL, Flipkart will work towards making available a wide range of products for fashion-conscious consumers across different retail formats, Kalyan Krishnamurthy, CEO of Flipkart Group, had said in October.
In July, 2020, Flipkart had also bought a stake in Arvind Youth Brands, the owner of the Flying Machine brand, for ₹260 crore.
