Aditya Birla Fashion and Retail Ltd has partnered with fashion designer Tarun Tahiliani to form a new entity that will soon launch a contemporary men's ethnic wear brand.
"Aditya Birla Fashion and Retail Ltd (ABFRL) has announced a strategic partnership with India's ace designer Tarun Tahiliani to form a new entity that will soon launch a contemporary men's ethnic wear brand.
"The new brand will operate in the premium occasion wear segment and will offer the entire range of high quality, sophisticated celebration wear for men at accessible price points," the company said in a regulatory filing.
ABFRL will hold 80 per cent stake in the new entity, while Tarun Tahiliani will hold the remaining 20 per cent.
The new brand aims to build a Rs 500 crore business in the next 5 years with more than 250 stores across the country, the statement added.
The brand plans to launch retail stores by September 2021.
As part of the deal, ABFRL will also acquire a 33 per cent stake in the existing Luxury Couture business of Tarun Tahiliani, with the option to increase it to 51 per cent in the next few years.
ABFRL Managing Director Ashish Dikshit said, "Over the next few years, ethnic wear is going to be an important category as confident Indians rediscover their culture and heritage. Tarun Tahiliani has been at the forefront of the emergence of the Indian design industry... The ethnic wear segment is a large and growing market with a significant opportunity to build scale." He added that the combined expertise of Tarun Tahiliani and ABFRL will enable the new brand to make a strong impact in the market.
Dikshit also said the existing couture brand will continue to benefit from the fast-growing luxury segment of the market.
The proposed acquisition is subject to necessary statutory approvals and signing of definitive agreements.
Last month, Aditya Birla Fashion and Retail Ltd had announced the acquisition of 51 per cent stake in designer brand Sabyasachi to strengthen its position in the growing apparel market and tap the luxury segment.
ABFRL has signed a definitive agreement for acquiring 51 per cent stake in the Sabyasachi brand and said it will infuse Rs 398 crore, which will be subject to closing adjustments.