Reliance Brands on Wednesday announced that its wholly-owned arm in the UK, Reliance Brands Holding UK (RBUK), has formed a joint venture with UK fashion retailer Superdry to pick up its intellectual property assets in South Asia for £40 million (Rs 402 crore).
The joint venture — in which the struggling Superdry will invest £9.6 million for a 24% stake — will cover Sri Lanka, Bangladesh and India. “The consideration for the sale of the South Asian IP is £40 million, which is estimated to result in Superdry receiving gross cash proceeds of £30.4 million (approximately £28.3 million net of fees and taxes),” a statement said.
RBUK has been Superdry’s exclusive franchise partner in India since 2012. An average Superdry T-Shirt would set you back by Rs 4,000. Despite the price tag, it has had a “reasonably good run” in India in its first decade. It is available at 200 points of sale across 50 cities. “E-commerce continues to drive incremental growth for the brand, boosting its reach beyond 2,300 cities, underlining RBL-run Superdry India operations as the largest franchisee network of the brand globally,” said the company.
According to estimates, India’s overall fashion market is valued at over $60 billion and fashion apparels would comprise over 50%. Superdry operates in the active wear segment within fashion but the segment holds great promise, say experts.
“This is a win-win for both the brands,” said Harminder Sahni, consultant in the textile, apparel, retail, CPG and food sectors. “While Superdry has been doing badly in most of its international markets, it has established itself as serious player in the premium/active active wear space in India. For its part, if Reliance gets full control over aspects like sourcing and product development, it can improve the lot for the brand in a big way.” Add to that Reliance’s tremendous retail footprint and Superdry can shift into a different growth trajectory altogether.
Superdry’s global sales last year were £690 million ($847 million) and it was forced to take a one-year £25-million loan from restructuring specialist Hilco in August. After posting a £17.7-million loss in H1 of FY23, the retailer said the “remainder of the year is uncertain”.
To steady the boat, Superdry had been scouting for international partners for some time. In March, the brand had announced a similar deal with South Korean retail group Cowell Fashion to sell the IP of its Asia Pacific offering for £40 million. “But that agreement covered markets such as South Korea and China and excluded the three markets in the purview of the current JV,” said a Reliance Retail official.
“It doesn’t matter that Superdry is struggling in other markets,” said Sahni. “We have umpteen examples of brands that have done very well in India when internationally their performance is nothing to write home about. Look at Arrow, Louis Philippe.”
The brand has introduced swimwear, fragrances as well as an exclusive Denim & Shirt range in India earlier this year. In 2019, Superdry expanded into sports and activewear under Superdry Sport, adding performance-driven products to its portfolio. Actor Kartik Aryan was roped in as its brand ambassador in 2022.