Flipkart invests Rs 260 crore in Arvind Youth Brands

Flipkart Group bought a minority stake in Arvind Youth Brands, a subsidiary of Arvind Fashions Ltd’s (AFL), for Rs 260 crore (US$ 36.88 million). The company, which owns denim brand Flying Machine, plans to build the brand online and in India's smaller markets.

Flying Machine is a four-decade old brand and has been selling on Walmart-backed Flipkart and Myntra for over six years.

"Through this investment, the Flipkart Group and Arvind Fashions will work collaboratively to identify opportunities and synergies to innovate and develop products with strong value propositions at attractive price points," as per the Arvind Fashions Ltd filing to the exchanges.

Arvind Fashions oversees international and local fashion apparel brands in the country such as US Polo Assn., Arrow, GAP, Tommy Hilfiger, Flying Machine, Aeropostale, The Children’s Place and Ed Hardy. It also operates the value fashion retail chain, Unlimited, apart from a partnership with beauty retailer Sephora for its India business.

The company has been trying to reduce its dependence on physical stores. With this move, it is moving online for its business.

"The partnership with the Flipkart Group will help us accelerate our online growth strategy as we focus our efforts on developing an omni-channel retail approach for Arvind Youth Brands and Flying Machine," said Mr J. Suresh, managing director and chief executive officer, Arvind Fashions.

Mr Suresh added that Flipkart and Myntra will be the brand's preferred online partners, even as it continues to grow offline sales through channels like exclusive brand stores, department stores and multi-brand stores.

Flipkart will leverage the brand's popularity that has over the years moved to India's smaller cities and expand its presence on its platform with value price points for shoppers in that segment.

"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 and enhance the strong brand equity that has been built over the last few decades, “ said Mr Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group.

In another filing to the exchanges, Arvind Fashions Ltd., said the company and its wholly owned subsidiary, Arvind Lifestyle Brands Limited, have each signed definitive agreements to transfer the wholesale trading and the retail trading business in "Flying Machine" brand to a wholly owned subsidiary, Arvind Youth Brands Private Limited.

In FY19, Flying Machine brand, under Arvind Fashions Ltd., recorded a standalone turnover of Rs 365 crore (US$ 51.78 million).

Flipkart has been gradually growing its presence in India's fashion apparel market.

Fashion retailer Myntra, part of the Flipkart Group, won the rights in 2017 to manage Spanish fashion brand Mango’s offline stores in India, as well as sell the brand exclusively on its online marketplace.

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.