Aditya Birla Fashion and Retail Ltd said on Tuesday it has acquired the Indian business of fashion chain Forever 21 from Diana Retail Pvt Ltd, the US-based company’s local franchise partner, for $26 million (Rs 175 crore).
The acquisition will help the company create a strong foothold in the women’s western wear segment, the retail arm of the diversified Aditya Birla Group said in a stock-exchange filing.
Diana Retail, promoted by DLF Brands Ltd, was the franchisee for Forever 21 for three years. It operated 12 stores and also sold products online. Diana Retail reported net sales of Rs 262 crore in 2015-16.
Aditya Birla Fashion said the Forever 21 business will form part of its Madura Fashion & Lifestyle division.
The Indian company had in May signed a memorandum of understanding with Forever 21 to acquire the online and offline rights for the Indian market and its store network in the country.
Forever 21, which competes with Zara and Sweden's H&M, entered India in 2010 through a Middle East-based group Sharaf Retail but could not scale it up. In 2013, it tied up with DLF Brands to open nearly 50 stores in five years in the country. However, it didn’t open as many stores as planned.
Based in Los Angeles, Forever 21 sells fashion merchandise for men, women and kids. The company, which was launched in 1984, operates almost 700 stores in 48 countries with retailers in the US, Australia, Brazil, Canada, China, France, Germany and others. Besides Forever 21, the brand portfolio also includes Love 21 and Heritage.
Aditya Birla Group had last year consolidated its branded apparel business under its lifestyle retail firm Pantaloons Fashion and Retail India Ltd and renamed it as Aditya Birla Fashion & Retail, creating India's top branded clothing company by revenue and number of sales outlets.
The company posted net sales of Rs 6,060 crore in 2015-16. It has been in the red for the past couple of years, due mainly to the loss-making Pantaloons business.
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