Metro Brands shares surge 7% on partnership with New Era Cap

Shares of Metro Brands surged nearly 7 percent in intraday trading on Friday, August 9, marking a second consecutive session of gains following the announcement of a partnership with New Era Cap, a well-known American headwear brand.

New Era Cap, based in New York and a leader in sports fashion headwear, has entered into a long-term licensing agreement with Metro Brands. According to an exchange filing, this partnership will enhance New Era's retail presence in India and bolster Metro Brands' expansion in the athleisure market.

"Under the agreement, Metro Brands Ltd (MBL) receives exclusive distribution and sales rights for New Era products, including headwear, apparel, and accessories, through retail stores and kiosks. MBL will also manage online sales via its own websites, New Era's sites, and online marketplaces. Additionally, New Era products will feature in upcoming Foot Locker stores in India," the exchange filing stated.

The stock climbed as much as 6.78 percent during intraday trading, reaching a high of ₹1,430.10. Over the last two trading days, the stock has gained more than 9 percent.

Trend so far

With today's rally, the stock is now less than 1 percent away from its record high of ₹1,440.45, set on November 30, 2023. The stock has also advanced 44 percent from its 52-week low of ₹992.65, recorded on June 4, 2024.

Over the past year, the stock has risen over 25 percent, with a 13 percent increase in 2024 year-to-date. It has delivered positive returns in six of the eight months so far. In August, it has gained 3.5 percent, continuing its upward trend for the fourth consecutive month. Before this, the stock rose 10 percent in July, 8 percent in June, and 6 percent in May. However, it saw a correction of around 6.5 percent in April, following a 1 percent rise in March and a 3.5 percent increase in February. In January, the stock declined by 13 percent.

Metro Brands Ltd, operating over 800 stores across India, is preparing to launch the first Foot Locker store in the country. The Metro Brands Ltd portfolio includes notable Indian brands like Metro Shoes and Mochi, as well as popular international names such as Crocs, FitFlop, and Fila.

"The Indian headwear market has grown significantly through e-commerce. Recognizing the opportunity for retail expansion, Metro Brands plans to strategically penetrate the market by integrating sports culture into the cap industry with New Era," the company added.

New Era, famous for its official on-field caps for Major League Baseball and the National Football League, is celebrated for its signature headwear styles like the 59FIFTY fitted cap, the 9FIFTY snapback, and the adjustable 9FORTY, appealing to a wide range of sports fans and fashion enthusiasts.

Regarding the partnership, Nissan Joseph, CEO of Metro Brands Limited, stated, “At Metro Brands Ltd, our vision is to bring the finest global brands to India and meet our customers' complete athleisure wardrobe needs. This partnership is a significant milestone in that journey. It will allow us to revolutionize the cap market, enhance the retail experience, and cater to the evolving preferences of our customers. We are confident that, through this collaboration, caps will become the next must-have accessory.”

Meanwhile, Metro Brands' board of directors is scheduled to meet today, August 9, 2024, to review and approve the unaudited financial results for the quarter ending June 30, 2024 (Q1FY25).