Flipkart buys minority stake in Arvind Fashions' arm for Rs 260 crore
Arvind Fashions Limited announced on Thursday that Flipkart Group has invested Rs 260 crore in the company to purchase a significant minority stake in its recently formed subsidiary-Arvind Youth Brands, which will own ‘Flying Machine’ brand.
This investment will further strengthen the partnership between the two organisations that have been working together in catering to the demands and needs of the fashion-conscious youth in India, for years.
Flying Machine is one of the leading denim brands in India and has been retailing on Flipkart Group platforms i.e. Flipkart and Myntra for more than six years. This brand is already popular among the youth across metro cities and smaller tier towns for its new and stylish designs. With this investment, both the companies plan to identify opportunities as well as synergies to innovate and develop products along with strong value propositions and attractive prices.
Arvind Fashions is India's leading casual and denim player, which owns some of the renowned brands such as US Polo Assn, Arrow, GAP, Tommy Hilfiger, Calvin Klein, Flying Machine, Aeropostale.
With the outbreak of COVID-19, followed by the nationwide lockdown, the footfalls were deeply impacted, which led to the adverse effect on the company’s revenue and profitability in the March quarter of FY20. Post the easing of lockdown restrictions, currently, its 75 per cent stores are operational but the footfall and revenue remain way below the pre-Covid levels.
The company is investing and scaling up its digital and omni-capabilities. Due to the lockdown and fear of the pandemic, people prefer to shop through online portals. As a result, the company is witnessing good traction through this channel. Such investment and partnership with the e-commerce players will help the company to drive demand and volumes for its products.
On Thursday, the stock of Arvind Fashions hit an upper circuit of 5 per cent to Rs 178.50 at 1:17 pm but later closed at Rs 169.80.