Aditya Birla Lifestyle Brands, the demerged unit of Aditya Birla Fashion, which listed on Monday on the bourses, will invest Rs 300 crore annually in the business, a top official said.
The company, whose FY25 turnover stood at Rs 7,830 crore, has 3,253 stores across brands such as Louis Philippe, Allen Solly, Peter England and Van Heusen.
It is the largest branded apparel player in the country based on revenue and store count, with emerging brands such as Van Heusen Innerwear, Reebok and American Eagle also part of its portfolio.
“The plan is to double revenue and retail footprint in the next five years. A large part of the Rs 300 crore capital expenditure annually will go into retail expansion. A small part will be utilised to enhance internal capabilities as well as technology,” Ashish Dikshit, who is MD of both Aditya Birla Lifestyle and Aditya Birla Fashion, said.
The company hopes to add about 250-300 stores annually each year to strengthen its store network, Dikshit said, with the overall focus of the firm on organic growth rather than inorganic growth as it sets out to achieve its objectives.
Shares of Aditya Birla Lifestyle debuted at Rs 167.75 apiece on the BSE and Rs 167 apiece on the NSE. Based on the share price of Aditya Birla Fashion following the demerger in May, analysts had ascribed a value of Rs 171 per share to Aditya Birla Lifestyle, implying a market capitalisation of about Rs 21,000 crore.
On Monday, the stock slipped 4% intra-day following listing on the bourses in an overall weak market. Dikshit offered no comments on the impact of the ongoing Iran-Israel war on consumer or business sentiment, but did say that he saw the current retail slowdown “settling down” as consumers adjusted to new realities, including growing competition from online and offline lifestyle brands.
A retail veteran, Dikshit, 53, said the company would tap more consumption centres beyond tier 1 and 2 markets in the firm’s quest for growth. He also said that he was looking at least two brands touching Rs 2,500 crore in revenue each in the next few years from Rs 2,000 crore each now, driven by brand extensions, category and store expansion. The prospect of growth, he said, was higher in small towns and cities, which were as new consumption centres, he added.
Analysts say Aditya Birla Lifestyle is aiming to expand margins by 300 basis points annually, with a target to become debt free in the next 2-3 years. As per the demerger scheme of arrangement, Aditya Birla Fashion’s total borrowings—estimated at Rs 3,000 crore as of March 31, 2024—has been apportioned between the two companies. An estimated Rs 1,000 crore of debt has been transferred to Aditya Birla Lifestyle, while the remaining Rs 2,000 crore continues to stay with Aditya Birla Fashion.