India’s one of the biggest conglomerate Aditya Birla group company Aditya Birla Fashion and Retail has now forayed into branded ethnic segment with the acquisition of Jaypore E-Commerce Private Limited, which markets and sells ethnic fashion merchandise under its own brand Jaypore.
ABFRL, which has invested very little shelf space so far to ethnic wear market, is buying the brand at an enterprise value of `110 crore in an all-cash deal.
Jaypore is a home-grown retailer that offers curated collections of handmade, handwoven and handcrafted apparel, jewellery, home textiles and accents, traditional and contemporary art and more from all over the country.
“The Board of Directors of Aditya Birla Fashion and Retail Limited (ABFRL) approved the signing of Share Purchase agreement to acquire Jaypore. The business comprises online and offline operations,” the company recently reported in a filing to the Bombay Stock Exchange.
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The proposed acquisition is subject to necessary statutory approvals and signing of definitive agreements, it said.
In a strategic step that will give its closet a whole new paradigm, Aditya Birla Fashion and Retail (ABFRL) recently made a surprising announcement that it is acquiring ethnic brand Jaypore. Given the ever increasing demand of branded ethnic wear, Jaypore — which basically sells online — has the potential to become a big business, especially since ABFRL’s game plan is to go offline from online.
Commenting on the development, Ashish Dikshit, Managing Director, ABFRL said, “Ethnic wear is the largest segment in the Indian fashion apparel market. While ABFRL has built a diversified portfolio of brands across different segments, ethnic wear space is currently under-represented in our bouquet of offerings to consumers. The proposed acquisition is, therefore, a great strategic addition to our portfolio and gives us a strong footing in a segment that is growing in double digits.”
“Jaypore is a brand with strong equity and with a differentiated offering of products based on Indian crafts. It provides a great platform for us to build a strong presence in the Ethnic segment and in accessories and home segment. This acquisition will further strengthen leadership position of ABFRL in the branded fashion space,” he added.
ABFRL, a part of USD 44.3 billion Aditya Birla Group, came into existence after the big bang merger of the branded apparel businesses of Aditya Birla Group comprising ABNL’s Madura Fashion division and ABNL’s subsidiaries – Pantaloons Fashion and Retail (PFRL) and Madura Fashion & Lifestyle (MFL) in May 2015. Before the consolidation, PFRL was renamed Aditya Birla Fashion and Retail Ltd.
Indian wear currently accounts for about nearly three-fourths of the $19 billion women’s apparel market in India, according to Edelweiss Research. However, branded ethnic wear has only a small share of about 10% of the $13.5-billion women’s Indian wear market, with salwar kameez, kurtis and mix accounting for $6.5 billion and sarees and blouses around $7.2 billion.
Of this $6.5 billion, branded apparel accounts for 21% or $1.4 billion and the main contribution of 79% or $5.1 billion comes from unbranded fragment of the market.
Additionally one more announcement from Aditya Birla Fashion that it has also acquire 100 percent stakes in TG Apparel & Decor (TG) for an equity value of up to Rs 25 lakh subject to the book value on closing. The deal will take 30-45 days to conclude. TG Apparel & Decor was incorporated in 2015 and retails ethnic fashion, both online and offline, in India and abroad.