Arvind Lifestyle Brands, a subsidiary of public listed textile and apparel retail firm Arvind Ltd, has acquired the business operations of British fashion retailers Debenhams and Next and American lifestyle brand Nautica in India from Planet Retail for Rs 55 crore ($10.3 million).
While Debenhams and Next will boost the company’s womenswear and kidswear portfolio, Nautica will strengthen its menswear segment. The three brands currently generate revenues of Rs 70 crore, which Arvind plans to take to Rs 500 crore in the next five years. Arvind will invest close to Rs 150 crore in next three years (inclusive of the acquisition cost) in the acquired business, said J Suresh, managing director and CEO of Arvind Lifestyle Brands.
Sanjay Lalbhai, chairman and MD of Arvind Ltd, said, “This acquisition signals our entry into the department store segment and also the globally fast growing apparel speciality retail segment. This acquisition will accelerate our growth and contribute to our vision of achieving sales of Rs 5,000 crore over the next five years.”
According to Suresh, the company plans to clock sales of Rs 3,000 crore from its organic business and around Rs 2,000 crore from its inorganic expansion moves. The company clocked sales of Rs 1,200 crore for year ending 2012, and inclusive of other joint venture and brands it clocked revenues of Rs 1,600 crore.
With these three acquisitions, Arvind’s list of international brands have increased to 13. The brands acquired from Planet Retail has under-performed since its journey in the country.
With acquisition of Debenhams, Arvind has now entered the bridge-to-luxe department store segment and plans to increase the current number of Debenhams stores in India from two to eight in the next three years. It also plans to increase the footprint of Next stores from three to 12 over the same period.
But Arvind is betting big on the licensing agreement with Nautica, as it plans to set up 30 more Nautica stores taking the total to 41 free standing Nautica stores and 71 shop-in-shops in the next three years.
Nautica, which already has a profitable brand, will start contributing in the books of Arvind from this year, added Suresh.
At the same time, Arvind Ltd is expanding its foot print in Africa and Middle East. It has already started sales of its brand Arrow in the region and will expand in Zimbabwe, Ethiopia and other countries. It will soon launch Flying Machine and is also exploring options for Elle in Africa too. Arvind has a licensing agreement with Elle which it had got last year.
Suresh added, “At present overseas operations contribute a very small amount of sales of just around 5 per cent of total and we are looking to aggressively expand in eastern and middle African region.”
(Edited by Prem Udayabhanu)