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Birla Fashion could pay Rs 100 crore for majority stake in Bewakoof, Retail News, Retail ET


Birla Fashion may pay Rs 100 crore for majority stake in Bewakoof

Fashion Aditya Birla & Retail (AFRL) is in the final stages of acquiring a controlling stake in skin and brand accessories bewakoof at around 100 cores, marking its entry in the direct-to-consumer (D2C) segment.

“Both companies have signed a non-disclosure agreement and have also completed the due diligence process. The team at Bewakoof is also moving to join Aditya Birla’s new company,” said an unnamed senior executive.

Bewakoof, founded in 2012, one of the first D2C brands in the country, has an annual revenue of about 250 cores. Since its inception, it has raised $160 million in funding from investors including InvestCorpIvyCap Ventures and Spring Marketing Capital.

India is an attractive market for apparel brands, especially with young people increasingly favoring Western-style clothing, a segment in which Bewakoof operates. Over the past few quarters, however, the company has been looking at strategic buyers and investments to fuel its growth plans, executives said.

ABFRL declined to comment while Bewakoof did not respond to ET questions.

In June, ABFRL established the D2C organization TMRW and said it would acquire and incubate 30 brands over the next three years. The new company, which is acquiring Bewakoof, is part of ABFRL’s strategy to build a portfolio of digital, new-age brands across categories in the fashion, beauty and lifestyle segments.

“We will certainly see more such deals take place in the near future. This also gives early-stage investors an opportunity to exit at a time when larger funding rounds seem a bit daunting amid the global economy, said Dhianu Das, co-founder of Agility Ventures. recession demand.

ABFRL, which sells Louis Philippe clothing and accessories, Van Heusen, Allen Solly and Peter England, among others, plan to allow multiple founders to operate in a synergistic platform that will have shared capabilities. During its earnings call last quarter, ABFRL said it would make eight to 10 early-stage digital-brand investments by the end of this financial year, and its initial focus will be on extensive fashion catalogs.

Experts say traditional companies are eligible to acquire new D2C brands to make up for their late entry into the online space, a channel that currently accounts for 30-50% for some brands. .

“Despite the decline in late-stage funding, startups in India are seeing the rise of large corporations looking to acquire established brands with established products. great products and strong customer loyalty. This is not only a strategy but a natural growth path for these companies,” said Abhimanyu Bisht, CEO of Venture Catalysts.

Nearly 590 new D2C companies have entered the Indian market in the last three years and they have raised a total of Rs 6,700 crore, according to Tracxn, a market intelligence provider of private company data. According to experts, the D2C market opportunity in India is expected to be $100 billion (about Rs 8 lakh) by 2025.

“With organic and inorganic construction, ABFRL’s new venture will initially be incubated and financed by ABFRL, then will raise external capital to accelerate its growth journey at an appropriate time in the future. ,” a note by Nuvama Institutional Equities said.

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