The country’s largest organised retailer, Reliance Retail, is in talks with Italian beauty brand Kiko Milano to acquire its India operations, enhancing its position in the beauty market and challenging rivals like Nykaa and Shoppers Stop. These discussions follow Reliance Retail’s recent acquisition of the Sephora beauty business in November last year, for Rs 216 crore from Arvind Fashions.
Informed sources have told FE that talks are underway to acquire the 51:49 India joint venture that exists between Italy’s Percassi Group and New Delhi-based DLF Brands. This JV operates around 8-10 Kiko Milano stores in Mumbai, Delhi and a few other cities such as Pune, Bengaluru and Noida. The deal size has been pegged at around Rs 100 crore, persons in the know said, and may include the franchise rights of the Kiko Milano brand for the Indian market.
“As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges,” Reliance Retail said in response to a mail on the issue.
However, the company is building a portfolio of beauty retail brands, industry sources said, as it seeks to straddle the beauty and personal care (BPC) market in the country, which is expanding at a rapid pace. A September 2023 report by consultancy Redseer notes that the domestic BPC market, which stood at $19 billion, would grow at 10% per annum in 5 years to touch $30 billion in size by 2027.
Tira, an in-house offline-and-online beauty destination launched by Reliance Retail in April last year sits at the premium end of the market; Blushlace, launched a few months ago in tier 2 and 3 cities, sits in the value segment, specialising in beauty and innerwear products. While Sephora is positioned at the mid-to-premium segment; Kiko Milano, an international brand, is positioned at the premium end of the BPC market.
A Tira spokesperson said: “The Indian beauty retail market is indeed growing, driven by factors such as a growing middle class, rising disposable incomes, and increasing urbanization. Reliance Retail has been rapidly expanding its presence in the beauty sector. And with the growing appetite for beauty products, several global brands are looking to expand in India.”