Aditya Birla Fashion to list flagship lifestyle brands as separate entity

Aditya Birla Fashion and Retail

01/04/2024 15:37

BENGALURU, April 1 (Reuters) - Apparel retailer Aditya
Birla Fashion and Retail (ABFRL)  ADIA.NS  said on Monday it was
planning to demerge Madura Fashion & Lifestyle into a separate
listed entity.
    The move follows the company posting losses for the
last three quarters due to weak demand as well as increased
investments in some brands. 
    Madura Fashion consists of four lifestyle brands - Louis
Phillippe, Van Heusen, Allen Solly and Peter England - and 
contributes to more than 70% of the company's total revenue,
according to its latest quarterly earnings report. 
    After the demerger, Aditya Birla Fashion said it would focus
on luxury and premium brands such as Ralph Lauren and Fred
Perry, while aiming to raise growth capital in 12 months to beef
up its balance sheet. 
    It will also allow the apparel retailer to increase its
focus on Pantaloons, which will be separated from Madura Fashion
that houses a mix of lifestyle, fast fashion, athleisure casual
sports clothing and innerwear brands. 
    "There is scope to re-evaluate capital structures to
optimize different parts of the portfolio," Aditya Birla Group
Chairman Kumar Mangalam Birla said. 
    The company said all its investors will have identical
shareholding in the newly formed entity.
    ABFRL's shares have lost 5.4% so far this year after
shedding 22% last year, while those of rival Trent  TREN.NS 
have added 27.5% after more than doubling last year.

 (Reporting by Manvi Pant in Bengaluru)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))