Aditya Birla Fashion partners with Tarun Tahiliani for ethnic wear brand

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February 25, 2021 9:34 AM

As part of the deal, ABFRL will also acquire a 33% stake in the existing luxury couture business of Tarun Tahiliani, with the option to increase it to 51% in the next few years.

ABFRL has been building on its portfolio of ethnic brands through partnerships and acquisitions of relevant businesses.ABFRL has been building on its portfolio of ethnic brands through partnerships and acquisitions of relevant businesses.

Aditya Birla Fashion and Retail (ABFRL) on Wednesday entered into a strategic partnership with designer Tarun Tahiliani to form a new entity which would launch contemporary men’s ethnic wear brand. ABFRL will hold an 80% stake in the new entity while Tarun Tahiliani will hold the remaining 20%.

The new brand will operate in the premium occasion wear segment and will offer the entire range of high quality, sophisticated celebration wear for men at accessible price points. The new brand aims to build a `500-crore business in the next five years with more than 250 stores across the country. The brand will launch the first set of retail stores by September.

As part of the deal, ABFRL will also acquire a 33% stake in the existing luxury couture business of Tarun Tahiliani, with the option to increase it to 51% in the next few years.

ABFRL has been building on its portfolio of ethnic brands through partnerships and acquisitions of relevant businesses. In 2019, it acquired a 51% stake in designer brand Shantanu & Nikhil while also signing an over `100-crore deal to acquire ethnic apparel and lifestyle retailer Jaypore. The recent transaction comes less than a month after the company struck a `398-crore deal to acquire a 51% stake in designer brand Sabyasachi.

From the recent acquisitions, it is clear that ABFRL is betting big on ethnic, analysts at Edelweiss Research said in a note. “With the new venture, the key thing to understand is how the company will differentiate it from Shantanu & Nikhil’s positioning and focus which is also men’s wear driven,” they said. Besides, ABFRL will have to strategise on driving scale and synergies with its existing businesses while managing the cultural aspects of these companies, the analysts added.

The Tarun Tahiliani label’s offerings range from couture and wedding wear to ready to wear collections for both men and women, as well as accessories, jewellery, interiors and homes.

“The ethnic wear segment is a large and growing market with a significant opportunity to build scale. The combined expertise of Tarun Tahiliani and ABFRL will enable the new brand to make a strong impact in the market. This partnership is in line with our stated strategy to craft a portfolio of brands that address the entire gamut of ethnic wear segments: Value, premium and luxury,” said Ashish Dikshit, managing director at ABFRL. As on December 31, 2020, the firm had a network of 3,157 stores.

According to Technopak, the total Indian ethnic wear market is valued at `70,000 crore; women’s ethnic wear has an 85% (`59,500 crore) share in the market and is expected to grow at a CAGR of 10% till 2022.

Read Also: Airtel enters ad tech industry with Airtel Ads; says users will receive relevant campaigns, not spam

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