Flipkart to invest Rs 260 crore in Arvind Fashions’ arm
The subsidiary will own the Flying Machine brand, which has been retailing on the Flipkart Group platforms for over six years, according to Arvind Fashions’ stock exchange filing.
Walmart-owned Flipkart has invested Rs 260 crore to buy a significant minority stake in Arvind Fashions’ recently formed subsidiary Arvind Youth Brands.
The subsidiary will own the Flying Machine brand, which has been retailing on the Flipkart Group platforms for over six years, according to Arvind Fashions’ stock exchange filing.
"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,” J Suresh, CEO of Arvind Fashions, said.
"Flipkart and Myntra will be our preferred online partner for the Flying Machine brand, while we continue to grow our offline sales through channels like exclusive brand stores, department stores and multi-brand stores," he added.
The deal comes at a time when India’s fashion and apparel sector has recovered only 35% of sales compared to January levels, according to data shared by Redseer Consulting exclusively with ET. Fashion sales in January stood at $7 billion, or $85 billion annualised.
Fashion was one of the worst-hit segments amid lockdown. Offline retailers continue to grapple with low footfalls in high-street shopping destinations and malls. Online platforms too have failed to match pre-Covid-19 demand in the fashion category.
"More brands in fashion will be looking for these kinds of deals either with Flipkart or Amazon as they can’t ignore the online channel anymore and it is difficult for them to build the online channel own their own," said Satish Meena, senior analyst at Forrester Research.
Analysts say Flipkart has strategically strengthened its fashion portfolio, where it already has a significant lead through Myntra, especially when rival Reliance Industries' Ajio and Tata-owned Tata Cliq have stepped up their online focus.
Kalyan Krishnamurthy, Chief Executive Officer at Flipkart Group, said Flying Machine is a brand that is known in households across India. “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," he said.
Arvind Fashions’ portfolio brands include Arrow, US Polo, and Tommy Hilfiger among others. The apparel maker had in December forecast that these brands will be back to double digit EBITDA margin in fiscal 2021. To be sure, this projection was made before the virus outbreak.
The subsidiary will own the Flying Machine brand, which has been retailing on the Flipkart Group platforms for over six years, according to Arvind Fashions’ stock exchange filing.
"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,” J Suresh, CEO of Arvind Fashions, said.
"Flipkart and Myntra will be our preferred online partner for the Flying Machine brand, while we continue to grow our offline sales through channels like exclusive brand stores, department stores and multi-brand stores," he added.
The deal comes at a time when India’s fashion and apparel sector has recovered only 35% of sales compared to January levels, according to data shared by Redseer Consulting exclusively with ET. Fashion sales in January stood at $7 billion, or $85 billion annualised.
Fashion was one of the worst-hit segments amid lockdown. Offline retailers continue to grapple with low footfalls in high-street shopping destinations and malls. Online platforms too have failed to match pre-Covid-19 demand in the fashion category.
"More brands in fashion will be looking for these kinds of deals either with Flipkart or Amazon as they can’t ignore the online channel anymore and it is difficult for them to build the online channel own their own," said Satish Meena, senior analyst at Forrester Research.
Analysts say Flipkart has strategically strengthened its fashion portfolio, where it already has a significant lead through Myntra, especially when rival Reliance Industries' Ajio and Tata-owned Tata Cliq have stepped up their online focus.
Kalyan Krishnamurthy, Chief Executive Officer at Flipkart Group, said Flying Machine is a brand that is known in households across India. “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," he said.
Arvind Fashions’ portfolio brands include Arrow, US Polo, and Tommy Hilfiger among others. The apparel maker had in December forecast that these brands will be back to double digit EBITDA margin in fiscal 2021. To be sure, this projection was made before the virus outbreak.