Walmart-owned Flipkart has invested Rs 260 crore to acquire a large minority stake in Arvind Fashions recently formed subsidiary Arvind Youth Brands, which will own the Flying Machine brand. This investment will focus on meeting the requirements and needs of young people interested in fashion in India.
"The Flipkart Group and Arvind Fashions (AFL) today strengthened their partnership, with an investment of Rs. 260 crore by the Flipkart Group to purchase a significant minority stake in AFL's newly formed subsidiary Arvind Youth Brands, which will own the Flying Machine brand, "said Arvind Fashions said in the regulatory filing.
"This investment is based on a long-term partnership between the two organizations that have been working together for several years to meet the demands and needs of young people interested in fashion in India," he said.
Arvind Fashions owns the Flying Machine brand, which has been sold on Flipkart and Myntra Flipkart platforms for over 6 years. Flying Machine is one of the leading denim brands in India.
Through this investment, Flipkart Group and Arvind Fashions will work collaboratively to identify opportunities and synergies for innovation and develop products with strong value propositions at attractive prices, the company said.
The transaction is subject to the usual conditions above. Metta Capital Advisors acted as AFL's financial consultants for this transaction.
Speaking about the investment, Kalyan Krishnamurthy, CEO of Flipkart Group, said: "Flying Machine is a well-known brand in homes across India, famous for youth and synonymous with value and style. Through this investment, we look forward to partnering with the Arvind Youth Brands team to continue developing the market. For its product portfolio and the strong promotion of brand value that has been built in the last decades. "
J Suresh, the Managing Director and CEO of Arvind Fashions, said: "The partnership with Flipkart Group will help us accelerate our online growth strategy as we focus our efforts on developing the multi-channel retail approach of Arvind Youth Brands and Flying Machine."
“Given the strong relationship with the Flipkart group and its presence in the world of online fashion, it has been a clear choice for us to establish this association through which Flipkart and Myntra will be our preferred online partner for the Flying brand. Machine, as we continue to increase our offline sales Through channels such as exclusive brand stores, department stores, and multi-brand stores. "
Arvind Fashions Limited and Arvind Lifestyle Brands, a wholly-owned subsidiary of the company, have signed final sales-to-sales, wholesale and retail agreements under the "Flying Machine" brand, respectively, to a wholly-owned subsidiary, Arvind Youth Brands.
In February of this year, the board of directors of the companies in question agreed to sell as "continuous work" on the basis of selling the recession in exchange for a mutually agreed-upon total amount, not less than the department's book value as listed in the date of the actual transaction. The company's shareholders also agreed to the deal on March 26, 2020, by postal vote.
In a separate development, Arvind Fashions Ltd (AFL) announced a consolidated net loss of Rs 208.12 crore, affected by the COVID-19 pandemic and subsequent market turmoil. Operating income decreased by 39.22 percent to Rs 710.46 crore during the fourth quarter of fiscal year 20, compared to Rs 1,168.96 crore in the corresponding quarter of last year.
For the fiscal year 2019-20, the company recorded a net loss of Rs 399.36 crore against a net profit of Rs 21.48 crore in the previous fiscal year. Its operating income in fiscal year 20 decreased 16.74 percent to Rs 3,866.30 crore compared to Rs 4,643.86 crore in 2018-19.
Source: Business Today
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