Aditya Birla Fashion and Retail Ltd will buy a stake in the couture business of Tarun Tahiliani as well as launch a brand with the designer, the latest in a string of deals by the firm aimed at ethnic wear push.
Aditya Birla Fashion will purchase 33% of Goodview Properties for Rs 67 crore ($9.3 million) and will have the option to increase holding to 51% in the next few years, going by a filing.
Moreover, the firm and the designer will launch a brand focusing on premium occasion wear. The new entity aims to build a Rs 500 crore business in the next five years with more than 250 stores across the country.
It will launch the first set of retail stores by September this year. Aditya Birla Fashion will hold 80% of the new entity and Tahiliani the rest.
The deal comes in less than a month of Aditya Birla Fashion saying it had entered into an agreement to acquire a 51% stake in designer brand Sabyasachi Couture.
In branded ethnic wear, the fashion and retail firm has previously made investments in Jaypore and Shantanu & Nikhil.
Last year in October, it raised Rs 1,500 crore from ecommerce major Flipkart. It had said then that the capital would be used to scale further growth in segments such as athleisure, innerwear, and ethnic wear.
Aditya Birla Fashion houses brands such as Louis Pillippe, Van Heusen, Allen Solly, and Peter England. As on 31 December 2020, the company had a network of 3,157 stores across nearly 29,900 multi-brand outlets with 6,835 points of sales in department stores across India.
In 2012, it acquired a controlling stake in retail brand Pantaloons from the Future Group for Rs 1,600 crore.
Aditya Birla Fashion reported a revenue of Rs 8,788 crore for 2019-20.
Not too many deals have been reported in the ethnic wear segment in the recent past.
In 2019, Mumbai-based private investment firm Alpha Capital invested Rs 80 crore ($11.5 million) in women’s ethnic and casual wear label Shree.
In the past, women’s apparel brands have raised private equity funding, such as Biba (Warburg Pincus and Faering Capital), AND (General Atlantic) and W (TA Associates).