Aditya Birla Fashion said it has entered into definitive agreements to acquire 51% stake in TCNS Clothing, owner of the listed women’s branded apparel retailer that owns brands such as W, Elleven and Aurelia, for Rs1650 crore.
As part of the transaction, ABFRL will make a conditional open offer to acquire up to 29% stake at Rs 503 per share from public shareholders and acquire the remaining stake from the founder promoters to reach an overall shareholding of 51% in TCNS. Post the deal, TCNS will be amalgamated with ABFRL under the merger scheme where public shareholders of TCNS will receive 11 shares of ABFRL for every six shares that they hold in TCNS.
“This deal is yet another marker of the Aditya Birla Group’s faith in the dynamism and buoyancy of the Indian consumer economy. The TCNS deal is indeed a significant milestone as it complements our existing portfolio of exceptional brands across the entire spectrum of Indian fashion. By embracing TCNS’s portfolio of loved women’s ethnic brands, we are reinforcing our commitment to ethnic wear, the largest category in the apparel industry,” Kumar Mangalam Birla, Chairman, Aditya Birla Group, said.
With this acquisition ABFRL’s ethnic wear portfolio is expected to reach Rs 5000 crore in the next three years. TCNS had sales of Rs896 crore during FY22.
“TCNS has been a pioneer in branded women’s ethnic wear market in the country. The market continues to offer long-term growth opportunities and our partnership with ABFRL will help us fully realize this potential. ABFRL’s proven brand- building capability, distribution strength and strong ecosystem of partners will help our brands into its next phase of growth and profitability,” said Anant Daga, Managing Director of TCNS.
About seven years ago, the Aditya Birla Group restructured its retail business by carving out the apparel-making Madura Fashion and Lifestyle division from Aditya Birla Nuvo (ABNL) and merging it with listed loss-making Pantaloon. This created Aditya Birla Fashion & Retail (ABFRL), the country’s largest listed branded apparel company, with annual sales of Rs 8,136 crore.
The company has segmented its business into six sub-categories — lifestyle, Pantaloon, athleisure, youth fashion, super premium and ethnic. However, most brands are focused on western style clothing, a segment significantly smaller than the overall women’s ethnic wear in the mass market.
The company’s lifestyle division runs nearly 3,200 stores for brands including Louis Philippe, Van Heusen, Allen Solly and Peter England. In addition, department store chain Pantaloons has another 396 stores, while the company also runs women’s fashion brand Forever21.
In the ethnic segment, the company acquired Jaypore, a premium craft-based artisanal brand, and also invested in designer brands Shantanu & Nikhil, Tarun Tahiliani, Sabyasachi and Masaba. The company also bought the India business of global sportswear brand Reebok a year ago, and has long-term exclusive partnerships with brands such as Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21 and American Eagle.
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