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Aditya Birla Fashion and Retail Ltd (ABFRL) on Wednesday signed a definitive agreement to acquire 51% stake in Indian luxury designer label Sabyasachi, a brand owned by Sabyasachi Mukherjee, the Mumbai-based retailer said.

The company will infuse 398 crore for 51% interest in the label run by Sabyasachi Couture, a partnership firm, engaged in the business of manufacturing, distribution and sale of designer apparel, jewellery and accessories under its own brand ‘Sabyasachi’, it said in a filing to the stock exchanges.

Sabyasachi Couture was incorporated in 1990. In FY20, it had a revenue of 274 crore.

The Sabyasachi brand has strong Indian roots and global appeal, ABFRL said. It enjoys a strong franchise in India, the US, the UK and West Asia. The ABFRL platform will complement brand Sabyasachi on its journey to becoming a global luxury house out of India, it said.

Sabyasachi will be ABFRL’s third investment in an Indian ethnic wear brand since mid-2019. In July 2019, the company announced a partnership with leading fashion designers Shantanu & Nikhil with the acquisition of a 51% stake in Finesse International Design Pvt. Ltd, their company that makes bespoke apparel for men and women under the brand name Shantanu & Nikhil.

In June 2019, ABFRL—which retails brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England—acquired ethnic apparel and lifestyle retailer Jaypore for 110 crore. The deal was intended to help ABFRL tap the fast-growing ethnic apparel market.

The stake in Sabyasachi will add weight to ABFRL’s growing ethnic wear portfolio. It will accelerate the company’s strategy to capture a large share of the ethnic wear market through a comprehensive and attractive portfolio of brands, across key consumer segments, usage occasions and geographies, ABFRL said.

ABFRL expects to build a large ethnic wear business over the next few years to complement its strong and diverse portfolio in the western wear segment of the Indian apparel market.

“We believe that over the next few years, ethnic wear is going to be an increasingly important category as young and confident Indians rediscover their culture and heritage. The Sabyasachi brand, through its emphasis on excellence in design and craftsmanship, has set new benchmarks and captivated the imagination of the sophisticated global Indian consumer... Over the next few years, ABFRL intends to craft a portfolio that addresses the entire gamut of ethnic wear segments: value, premium and luxury," ABFRL managing director Ashish Dikshit said.

The proposed acquisition is subject to statutory approvals.

ABFRL is part of the Aditya Birla Group. It is a pure-play fashion house with a network of 3,025 stores and a revenue of 8,788 crore in FY19-20

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