With a payment of US $ 26 million, Aditya Birla Fashion and Retail (ABFRL) has acquired rights to sell US fast fashion major Forever 21 in the Indian market.
Sector specialists point out that although the exact contours of the deal have not been revealed, it would be safe to assume that in keeping with its DNA, ABFRL has signed a long term partnership with the US fashion brand, probably spanning more than a decade. Unlike DLF Brands, ABFRL has manufacturing units that could become sourcing hubs for Forever 21.
Also Read – Forever 21 to retail in India through Aditya Birla Fashion
Fast fashion as a category is growing at a healthy pace, maybe between 15 per cent and 20 per cent and within that, Forever 21 is among the popular and leading brands worldwide. Disclosures by ABFRL state that Diana Retail, the current franchisee of Forever 21 reported revenues of Rs. 262 crore in FY 2016, having more than doubled the turnover in two years. The transaction involves acquisition of the Diana Retail with effect from July 1 through a business transfer agreement not share transfer.
In a BSE filing, ABFRL mentioned, “The company has executed a business transfer agreement with Diana Retail and DLF Brands for acquisition of the business undertaking of Diana Retail… under the Forever 21 brand and also through e-commerce channel on a going concern basis, in the Indian market.”