Aditya Birla Fashion steps up presence in ethnic wear

Ties up with designer Tarun Tahiliani; second such deal in a month

Aditya Birla Fashion and Retail on Wednesday said it is in a tie up with designer Tarun Tahiliani to form a new entity. This entity would soon launch a men’s ethnic wear brand in the marketplace. This is the second deal by Aditya Birla Fashion in a month. In January, the company acquired a 51 per cent stake in designer brand Sabyasachi for ~398 crore, as it sought to grow its presence in ethnic wear.

In the last two years, Aditya Birla Fashion has picked up stakes in Shantanu & Nikhil and etailer Jaypore.com for ~60 crore and ~110 crore, respectively.

The new brand, to be launched in partnership with Tahiliani, aims to build a ~500 crore business in the next five years. It will set up over 250 stores across the country and launch the first retail store by September this year. In a statement, the company said it will hold 80 per cent stake in the new entity.

Tahiliani will keep the remaining 20 per cent stake. As part of the deal, Aditya Birla Fashion will also pick up a 33 per cent stake in the existing luxury fashion business of Tahiliani, with the option to increase it to 51 per cent in the next few years. Ashish Dikshit, managing director (MD), Aditya Birla Fashion, said ethnic wear would become an important category in the future, as Indians rediscovered their heritage.

“Tarun Tahiliani has been at the forefront of emergence of the Indian design industry. Launching a new brand with him will give the Indian consumer a new range of celebration wear,” he said.

The ethnic wear market, according to retail consultancy Technopak, is pegged at ~70,000 crore in size.

Around 85 per cent of this market comprises women’s wear, growing at 10 per cent per annum. However, the men’s ethnic wear segment – though smaller in size – is growing at double that rate of growth, the consultancy said.

Analysts tracking the firm say that ethnic wear was a gap in the retailer’s portfolio, which it sought to plug with its aggressive push into the segment.

Prior to this, the firm was known largely for its western wear, both in the formal and casual wear domains, targeted at men and women.

The firm closed FY20 with revenue of close to ~9,000 crore and a network of over 3,000 stores.

FY21 has seen the company raise money through a qualified institutional placement. It is aggressively beefing up its online and offline presence.