Looking to gain a leg up in the online fashion battle, ecommerce giants Amazon and Flipkart are currently eyeing a stake in Aditya Birla Fashion and Retail, which owns brands like Pantaloons, Allen Solly and Peter England.
The ecommerce marketplace giants are said to be separately in talks to acquire a minority stake in the company, which has a network of 3,004 stores and a presence across 23,700 multi-brand outlets, with 6,700 points of sales in department stores across India. Sources aware of the development highlighted that Flipkart may have an edge as talks with Amazon have fallen through. Aditya Birla Fashion and Retail reported INR 8,788 Cr in revenue in the financial year 2020 and has a market cap of around INR 13,000 Cr.
Walmart-owned Flipkart is looking to pick nearly 10-15% stake in the retailer’s fashion portfolio and onboard it as a strategic partner. The development was first reported by ET.
Flipkart has followed an acquisition strategy for other brands and verticals in the past as well in order to expand its operations and leverage strategic partnerships to keep its cost structures lean and scale rapidly. It 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,” the company had said in a press statement.
Earlier this month, Flipkart had also announced a House of Brands initiative to bring together Flipkart Fashion Originals, Myntra Fashion Brands and Myntra Brand Accelerators under one umbrella. The business is led by Manohar Kamath, who will report to Myntra CEO Amar Nagaram. Walmart-owned fashion and retail marketplace Myntra has brands like Dressberry, Mast & Harbour, Moda Rapido, Here & Now, Sztori and HRX, among others. Myntra has helped Flipkart maintain its lead in the category.
On the other hand, Amazon India has been trailing Flipkart in its fashion portfolio but has ramped up its presence over the last few years. The company has also launched private brands, and forged partnerships with designers to cater to the premium segment.
Besides this, the company has previously bought supermarket chain More from the Birla Group, along with the private equity firm Samara Capital. The US etailer had also picked up stakes in department store chain Shoppers Stop and Future Coupons, a promoter entity of Future Retail.