Arvind Fashions, which runs a portfolio of international brands such as US Polo Assn, GAP, Tommy Hilfiger, Calvin Klein, Arrow etc., on Tuesday said that its subsidiary Arvind Lifestyle Brands has received Rs 260 crore from Walmart-owned e-commerce company Flipkart. “Arvind Lifestyle Brands Limited, a subsidiary of the company, received Rs 260 Crore from Flipkart India Private Limited as consideration for the sale of a significant minority stake in Arvind Youth Brands Private Limited (which owns the Flying Machine apparel brand), another subsidiary of the Company,” the company said in a BSE filing on Tuesday. The announcement for investment was made by Arvind Fashions in a regulatory filing earlier this month.
The investment by Flipkart will add to its strengths in online fashion segment as it has already been leading the segment with the dominance of Myntra ahead of its rival Amazon. “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,” said Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group earlier this month in a statement.
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Flipkart’s stronghold in fashion is likely to further help it tap into the fast growing online fashion market with a share of 6 per cent in 2019, which is expected to grow to 14 per cent in 2024, in the overall fashion market that included traditional and organised retail. The market size would grow from $78 billion in gross GMV in 2019 to $133 billion in 2024, according to RedSeer. The share of traditional retail, despite declining, would remain the biggest from 67 per cent in 2019 to 57 per cent in 2024.
The investment by Flipkart has come amid its recovery back to pre-Covid level with increased adoption of digital medium for buying goods amid pandemic fear. The timing for acquiring stake in a prominent player like Arvind Fashion in the segment couldn’t have been more appropriate in order to benefit from the shift in consumer behaviour that is likely to stay ahead, at least for some time, amid looming Covid fear.