Aditya Birla Fashion and Retail to set up entity to acquire, scale D2C brands
Premium- The new D2C venture will initially be funded through ABFRL’s internal accruals
NEW DELHI : Aditya Birla Fashion and Retail Limited (ABFRL) will set up an entity that will incubate and acquire new-age, digital brands across fashion, beauty and other lifestyle segments, in a manner akin to building a house of direct-to-consumer brands, the company said on Friday.
“The board of directors of the company in their meeting today provided an omnibus approval to set up a subsidiary towards building a portfolio of distinct, new-age, digital brands across categories in fashion, beauty and other allied lifestyle segments. The direct-to-consumer or D2C portfolio will be built through organic and inorganic means," the company informed the exchanges on Friday.
The new D2C venture will initially be funded through ABFRL’s internal accruals, it said. “At an appropriate time, the company will look to bring in external capital to accelerate the growth journey," it said.
“At ABFRL, we want to build the next set of iconic brands in the digital space as we evolve with our changing consumers," said Ashish Dikshit, managing director, ABFRL.
The D2C market in India is expected to be $100 billion by 2025. The “house-of-brands" model has garnered investor interest as homegrown start-ups eye consolidation of niche online-first brands.
Competition in the space is heating up, with Thrasio-style e-commerce ventures such as 10Club and GlobalBees raising $40 million and $150 million, respectively, in large early-stage rounds among Indian startups, Mint had reported earlier. In November, Mensa Brands, which buys stakes in digital brands, raised $135 million at a valuation of around $1.2 billion.
ABFRL’s foray into this market comes as the fashion company, which sells Louis Philippe, Van Heusen, Allen Solly, and Peter England brands in India, has been on an investment spree. Last month, it acquired a 51% stake in House of Masaba Lifestyle Private Limited. This is besides its investments in Sabyasachi and Tarun Tahiliani. In 2019, ABFRL acquired omni-channel ethnic wear retailer Jaypore for ₹110 crore. It recently also signed a long-term licensing agreement to exclusively sell Reebok products in India and other ASEAN countries.
ABFRL will leverage capabilities around design, product creation, sourcing, and brand building in the offline space, while creating a fashion and lifestyle products-led portfolio in the digital space as well, the it said. The company will accelerate the process of building the D2C framework and identifying key talent for this play by tapping into the broader tech ecosystem and will collaborate effectively with its e-commerce partners, technology service providers, digital marketing agencies to scale this business rapidly, it said.
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On Friday, the company reported a 44% jump in December quarter consolidated revenue at ₹2,987 crore.
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