Flipkart-ABFRL deal gets CCI nod1 min read . Updated: 21 Jan 2021, 07:03 AM IST
Flipkart will work with Aditya Birla Fashion, for sales and distribution of its brands
The Competition Commission of India (CCI) on Wednesday approved the ₹1,500-crore Flipkart-Aditya Birla Fashion and Retail Ltd (ABFRL) deal, which will help the Walmart Inc.-owned e-tailer consolidate its position in the apparel business.
"Commission approves acquisition of a 7.8% minority stake in Aditya Birla Fashion and Retail Ltd by Flipkart Investments Private Ltd," CCI said in a tweet.
The deal, which was announced last October, will help Aditya Birla Fashion cut its debt and expand into new apparel categories and give Flipkart a significant edge over Amazon, which is trying to challenge the Walmart-owned company’s dominance in online fashion retailing.
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Flipkart, which also operates India’s largest online fashion marketplace Myntra, will work closely with Aditya Birla Fashion, for sales and distribution of its brands.
Offline retailers were in a bind as the Covid-led lockdown crushed business at retail stores for months last year. Formal wear, where Aditya Birla Fashion has a significant presence, has suffered as curbs have prompted consumers to work from home, depressing demand for office wear.
Aditya Birla Fashion draws 6% of its business from sales via e-commerce platforms.
Through this transaction with ABFRL, Flipkart will work towards making available a wide range of products for fashion-conscious consumers across different retail formats, Kalyan Krishnamurthy, CEO of Flipkart Group, had said in October.
In July, 2020, Flipkart had also bought a stake in Arvind Youth Brands, the owner of the Flying Machine brand, for ₹260 crore.