E-commerce major Flipkart has announced that it has bought a small stake in Arvind Fashions for ₹260 crores. The deal has been done through the recently formed subsidiary of Arvind Youth Brands. Notably, Arvind Youth Brand is being the brand Flying Machine.
Both companies said that through this deal, they will be able to serve the “fashion-conscious youth” in the country. Notably, Arvind Fashions has been around for the longest time and is the name behind local as well as international brands’ manufactures like Polo Assn, Arrow, GAP, Tommy Hilfiger, Calvin Klein, Aeropostale, the Children’s Place, and Ed Hardy.
The company has over 1200 stores in the country out of which a decent chunk of the outlets is starting post the 3-month long lockdown in the country due to the COVID-19 outbreak.
Flipkart Group CEO Kalyan Krishnamurthy in a statement said that “Flying Machine is a brand that is known in households across India, popular with the youth and synonymous with value and style. Through this investment, we look forward to partnering with 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."
Arvind Fashions MD and CEO J Suresh commented that “While COVID has been an unprecedented event which has significantly impacted the entire retail industry, as a leading casual wear company with a portfolio of brands with leading market positions and key capabilities in digital and omnichannel, we expect to gain market share as the business gets back to normal.
Notably, Flipkart in the past has made similar moves with acquisition of the players like Myntra and Jabong. It will be interesting to see how things pan out for both the players. For the moment, the shares of Arvind Fashions took nearly 5% dip post the announcement news.