New Delhi: Flipkart Group has bought a minority stake in Arvind Fashions Ltd’s (AFL) recently created subsidiary Arvind Youth Brands for ₹260 crore. The company, which owns denim brand Flying Machine, plans to build the brand online and in India's smaller markets.
The four-decade old Flying Machine brand has been selling on Walmart-backed Flipkart and Myntra for over six years.
"Through this investment, the Flipkart Group and Arvind Fashions will work collaboratively to identify opportunities and synergies to innovate and develop products with strong value propositions at attractive price points," Arvind Fashions Ltd said in a filing to the exchanges on Thursday.
Arvind Fashions manages international and local fashion apparel brands in the country such as US Polo Assn., Arrow, GAP, Tommy Hilfiger, Flying Machine, Aeropostale, The Children’s Place and Ed Hardy. It owns and runs the value fashion retail chain, Unlimited; apart from a partnership with beauty retailer Sephora for its India business.
The move could see Flying Machine move online in the future as it lowers it dependance on physical stores, according to sources.
"The partnership with the Flipkart Group will help us accelerate our online growth strategy as we focus our efforts on developing an omni-channel retail approach for Arvind Youth Brands and Flying Machine," J. Suresh, managing director and chief executive officer, Arvind Fashions said.
Suresh said Flipkart and Myntra will be the brand's preferred online partners, even as it continues to grow offline sales through channels like exclusive brand stores, department stores and multi-brand stores.
Flipkart will leverage the brand's popularity that has over the years moved to India's smaller cities and expand its presence on its platform with value price points for shoppers in that segment.
"Through this investment, we look forward to partnering with the team at Arvind Youth Brands to continue to grow the market for its portfolio of products and enhance the strong brand equity that has been built over the last few decades, “ said Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group.
In a separate filing to the exchanges earlier in the day, Arvind Fashions Ltd., said the company and its wholly owned subsidiary, Arvind Lifestyle Brands Limited, have each signed definitive agreements to transfer the wholesale trading and the retail trading business in "Flying Machine" brand to a wholly owned subsidiary, Arvind Youth Brands Private Limited.
For 2018-2019, Flying Machine brand, under Arvind Fashions Ltd., recorded a standalone turnover of Rs365 crore.
Flipkart has been steadily expanding its presence in India's fashion apparel market.
In 2017, fashion retailer Myntra, part of the Flipkart Group, won the rights to manage Spanish fashion brand Mango’s offline stores in India, as well as sell the brand exclusively on its online marketplace.