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India | International
As it expands its presence in India and eyes the bricks-and-mortar market, Amazon’s investment arm has acquired a 5 percent stake in Mumbai-headquartered fashion retailer Shoppers Stop.
Shoppers Stop said that its board of directors has approved an arrangement with Amazon.com NV Investments Holdings LLC. As part of which the fashion retail company will raise `. 179.26 crore from Amazon.com’s subsidiary and issue a five percent equity share to the e-commerce giant’s subsidiary in exchange.
The board, Shoppers Stop said in a filing on Indian stock exchange BSE, has also proposed to hold an extraordinary general meeting of the company on October 18, 2017 to seek approval of the shareholders. Amazon. com NV Investment Holdings LLC is a limited liability company incorporated in the US, and registered as category III Foreign Portfolio Investor with SEBI in India.
Amazon’s spokesperson said that the company believes the fashion retail market in the country is “under-penetrated and highly unorganised. We see a big potential in Shoppers Stop to disrupt this segment and want to be part of their growth story.” It’s the first time Amazon has invested in an offline fashion retail in India. The move comes on the heels of rival Flipkart raising a war chest from Japan’s Softbank. Flipkart owns fashion e-commerce companies Myntra and Jabong. The move came two years after Shoppers Stop had entered into a similar agreement with Snapdeal.com. Shoppers Stop has 80 retail stores across the country. The company has an online store of its own, but it is struggling to make a dent in the online space. Shoppers Stop also owns Hypercity grocery chain and Crossword Bookstores.