The ₹110 crore-deal will help ABFRL tap into the fast-growing ethnic apparel market
Jaypore started out as an online platform in the US in 2012, and launched in India in 2013
NEW DELHI :
Aditya Birla Fashion and Retail Ltd (ABFRL), which retails brands such as Louis Philippe, Peter England and Van Heusen, has acquired ethnic apparel and lifestyle retailer Jaypore for ₹110 crore, the company said in a filing to the stock exchange on Monday.
The deal will help ABFRL that also retails men and women’s western wear to tap into the fast-growing ethnic apparel market.
“Ethnic wear is the largest segment in the Indian fashion apparel market. While ABFRL has built a diversified portfolio of brands across different segments, ethnic wear space is currently under-represented in our bouquet of offerings to consumers," Ashish Dikshit, managing director, ABFRL said in a media statement.
“Board of directors of the company, at its meeting held today...have approved entering into a share purchase agreement with the existing shareholders of ‘Jaypore E-Commerce Pvt. Ltd’, a B2B entity which sells ethnic fashion merchandise under its own brand ‘Jaypore’ and of other third-party brands," ABFRL said in its filing. The proposed acquisition is a “great strategic addition to our portfolio and gives us a strong footing in a segment that is growing in double digits," Dikshit said.
Jaypore was set up in 2012 by Puneet Chawla and Shilpa Sharma. The company started out as an online platform to service the US market. However, the co-founders saw a huge demand coming from the domestic market and Jaypore was launched in India in 2013. Angel investor Haresh Chawla and Aavishkaar Venture Fund were among its early investors. The company sells apparel and accessories, and has a presence in both online and offline retail. It has two stores—one each in Delhi and Mumbai—and sells a curated collection of handmade and handcrafted apparel, jewellery and home textiles sourced from across India through its own website. The brand sells to over 60 countries.
For FY19, Jaypore posted a turnover of ₹39 crore, down from ₹41.9 crore it posted a year ago.
The deal would take 30-45 days to conclude, ABFRL said in the filing. Going forward, the company will continue to build on Jaypore’s offline stores to make it a significant part of its portfolio. India’s domestic apparel industry stood at ₹5,408 billion in FY18, growing at a CAGR of 13.8% since 2010. While men’s western apparel forms a major chunk of all clothes sold in the country, women’s apparel comprises 38% of India’s overall apparel market.
Here, ethnic wear is the largest sub-segment, according to data from CARE ratings. Brands such as Biba, W, Manyavar and scores of local players participate in the market.