Flipkart, the Walmart owned online commerce player, is investing Rs 260 crore in Arvind Youth Brands, the subsidiary of Arvind Fashions Ltd (AFL).
Arvind Youth Brands is Arvind Fashions’ recently formed subsidiary, which will own the Flying Machine brand.
“The Flipkart group and AFL strengthened their partnership through an investment of Rs 260 crore by Flipkart to purchase a significant minority stake in AFL’s recently formed subsidiary, Arvind Youth Brands, which will own the Flying Machine brand,” AFL said in a regulatory filing.
Arvind Fashions added that Flying Machine has been retailing on the Flipkart and Myntra platforms for more than six years.
“Through this investment, we look forward to partnering the team at Arvind Youth Brands to continue to grow the market for its portfolio of products and enhance the strong brand equity that has been built over the last few decades,’’ Kalyan Krishnamurthy,chief executive officer, Flipkart group, said while commenting on the transaction.
The transaction is subject to customary conditions precedent. Metta Capital Advisors acted as the financial advisors to AFL for this transaction.
``The partnership with the Flipkart Group will help us accelerate our online growth strategy as we focus our efforts on developing an omni-channel retail approach for Arvind Youth Brands and Flying Machine’’, J Suresh, Managing Director and Chief Executive Officer of Arvind Fashions, said.
Shares of Arvind Fashions today ended marginally lower at Rs 169.80 in the BSE. During the fourth quarter ended March 31, 2020, the company saw its consolidated income falling to Rs 752.23 crore as against Rs 1168.98 crore in the corresponding period of the previous year. The company reported a loss of Rs 208 crore as against a profit of Rs 15.21 crore in the year ago period.
Arvind Fashions has brands like US Polo Assn., Arrow, GAP, Tommy Hilfiger, Calvin Klein and Ed Hardy among others in its portfolio. It also owns and runs the value fashion retail chain, Unlimited.
