Aditya Birla Fashion and Retail Limited (ABFRL) has formed a strategic partnership with designer brand Sabyasachi Couture by acquiring 51% in the ethnic wear brand. The Rs. 398 crore all-cash deal will complete by next month as it is subject to miscellaneous statutory approvals and signing of the definitive agreements.
Today, Sabyasachi Couture is India’s most influential luxury designer brand that has marked its presence in categories like apparel, accessories and jewelry. The brand has a strong franchise base in India and has also garnered attention in countries like the US, UK and the Middle East.
According to reports for Financial Year 2020, Sabyasachi Couture earned a hefty revenue worth Rs. 274 crore. It should be noted that the brand has seen steady growth in its revenue generation. In the financial year 2018, the brand earned a revenue of Rs. 209 crore, in 2019, the brand earned Rs. 253 crore. It’s impressive how despite the COVID-19 pandemic, the brand continued growing and earned Rs. 274 crore last year.
Ashish Dikshit, Managing Director, Aditya Birla Fashion in a press release said how this new partnership will add “significant weight to ABFRL’s growing ethnic wear portfolio”. Dikshit in his release also said how this strategic acquisition will “accelerate the company’s strategy to capture a large share of ethnic wear market through a comprehensive and attractive portfolio of brands, across key consumer segments, usage occasions and geographies.”
ABFRL in its press release said how it is proud to form a strategic alliance with Sabyasachi and its journey to become the one and only luxury brand from India that caters to the entire world.
The release also stated that “We see a ‘Made in India’ global brand like Sabyasachi occupying the pinnacle of our ethnic wear portfolio. Over the next few years, ABFRL intends to craft a portfolio that addresses the entire gamut of ethnic wear segments: value, premium and luxury.”
Meanwhile, the founder and CEO of Sabyasachi Couture, Sabyasachi Mukharjee said how he is “honoured and excited to have found that partner in Kumar Mangalam Birla and ABFRL. Aligned in our vision, and committed to excellence, we will work together to grow a truly global luxury brand out of India.”
According to ICICI Securities, the Sabyasachi Brand’s acquisition is the third overall acquisition by Aditya Birla Fashion in the ethnic wear category since 2019. In 2019, the Birla led group acquired two ethnic apparel brands: Jaypore and Shantanu & Nikhil. Through this acquisition of the Sabyasachi brand, ABFRL will be able to make a deeper entry into the luxury ethnic wear segment.
However, after the news of the ABFRL’s 51% acquisition into the Sabyasachi brand broke, the shares of ABFRL went down to 6% and have brought the value of the company’s share at Rs. 153 on the Bombay Stock Exchange.
Shares of Aditya Birla Fashion and Retail (ABFRL) dipped as much as 6 per cent to Rs 153 on the BSE on Thursday.