UK fashion retailer Superdry on Wednesday said it will sell its intellectual property assets in South Asia to Reliance Retail for 40 million pounds (Rs 402 crore) through a joint venture.
Superdry, whose fashion line mostly includes sweatshirts, hoodies and jackets, will own 24 per cent of the joint venture while Reliance Retail, India's largest retailer, will have the remaining 76 per cent.
Under the agreement, Superdry's brand IP assets in South Asia will be permanently transferred to the new JV entity.
In a filing to the London Stock Exchange, Superdry plc said it has signed an IP joint venture agreement with Reliance Brands Holding UK Ltd for "the sale of its intellectual property assets, including the SUPERDRY brand and related trademarks in India, Sri Lanka, and Bangladesh to the joint venture vehicle".
The UK fashion retailer, which has been grappling with weak orders from wholesale partners cautious on stock levels and liquidity, said it expects gross cash proceeds of 30.4 million pounds.
RBUK is held by Reliance Retail Ventures Limited (RRVL) through its subsidiary Reliance Brands Limited - Superdry's exclusive franchise partner in India since 2012.
Reliance will continue to oversee brand operations in the three countries, Superdry said.
RBL is the premium retail arm of RRVL, which operates over 18,000 stores across India offering 50 different luxury fashion brands with a presence in 7,000 towns and a total shopping area of more than 65 million square feet.
Since partnering with RBL in 2012, the Superdry brand has expanded rapidly in India.
"Considering the backdrop of a growing Indian economy, a growing population of affluent shoppers, and ever-increasing apparel consumption rates, the Superdry brand in the market has an attractive potential. As the leading fashion retail operator in India, RBUK is best placed, through a majority IP ownership stake, to maximise the opportunity," it said.
Superdry said it believes that the partnership with Reliance will provide the best opportunities for the future growth of the brand in South Asia, allowing the company to focus on growing its brand and increasing sales in its more established territories, where it has the strongest expertise.
For the financial year to April 30, 2023, the South Asian IP generated approximately 1.8 per cent of total group sales and contributed revenue of 11 million pounds and profit before tax of about 2.6 million pounds, including centralised costs allocation.
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