BizReview Ep3: Aditya Birla Fashion

The Indian textile and apparel industry was valued at $165 billion in 2022, and it’s been growing at a relentless pace with the mushrooming of fast fashion and the uncontrolled increase in purchasing power. The change in dynamics of this industry is an interesting case study in itself. Back in the day fashion, to Indians, was the extravagant weekend bazaars or tailor made clothes which everyone wore on a daily basis; apparel came in much later. The significant shift came in 1991, when globalisation opened our doors to companies from across the globe. 

An interesting phenomenon thus occurred - the generation of aspiration. Indians were suddenly attracted to the western fashion trends and foreign brands took over. People started connecting foreign sounding brands to luxury - the Arvinds of the world were taken over by the Raymonds. A similar similar story is what outlines the subject of today’s episode - Aditya Birla Fashion and Retail (ABFRL).

Madura Garments, a company established in 1988 was acquired by the Aditya Birla group in 1999 and renamed to Madura Fashion & Lifestyle in 2010. This was ABFRL’s secret weapon in becoming a dominant force in the Indian market. Madura F&L was the first player to operate on a national scale, dedicated to the core business of fashion retail in India. It was also the forerunner in introducing premier international brands, enabling Indian consumers to buy the most prestigious global fashion wear and accessories within the country. This led Madura F&L to become the powerhouse of the four best-selling branded apparel brands in India, namely Louis Philippe, Van Heusen, Allen Solly and Peter England. Today Madura’s brands can be found in 4000 outlets and 3000 shop-in-shops (SIS) across departmental stores and multi-brand malls across the country. 

Madura F&L was the first entity to have a complete end-to-end, demand-driven, manufacturing to retail ecosystem in India comprising a unique combination of exclusive outlets and premium multi brand stores like The Collective, Planet Fashion, Hackett London and an in-house online store Trendin.com 

Another superpower of ABFRL is its chain of outlets which we all know and love as Pantaloons. Pantaloons Fashion and Retail (PFRL) is marketed as a playful and youthful fashion destination. With over 24 years of retailing experience, Pantaloons, a division of Aditya Birla Fashion and Retail Ltd. is one of the most loved fashion brands in India with 431 stores spread across 170+ towns and cities in the country, which offers a versatile collection & retail over 100 licensed and international brands, including our exclusive in-house brands. 

All accounted for, ABFRL has its retail space spread over 10.8 million square feet, and as a conglomerate has a strong network of 3,977 brand stores across the country, marking its presence in 33535 multi-brand outlets and 6723+ point of sale departmental stores across India. Over the years, the group has engaged in multiple partnerships, mergers and acquisitions. The most notable of them being: 

• Joint Venture with Hackett, 2012

• Partnership with Ted Baker for India Ops, 2016

• Acquisition of the India Operations of Forever 21 for $26 million, 2016

• Partnership with Simon Carter, 2017

• Partnership with American Eagle Outfitters, 2018

• Partnership with Ralph Lauren, 2018

• Acquisition of Jaypore for INR 110 crores, 2019

• Acquisition of 51% stake in luxury Indian label, Shantanu and Nikhil, 2019

• Partnership with Sabyasachi, acquiring 51% stake for Rs 398 crores, 2021

• Partnership with marquee designer Tarun Tahiliani, acquiring 33.5% stake for Rs 67 crores, 2021

• Purchasing of Indian arm of Reebok in 2022

• Partnership with designer Masaba Gupta, acquiring 51% stake. 

On the financial front,  ABFRL, with its operations spread in 900+ cities, generated a revenue of Rs 12418 crores with an EBITDA of Rs 1617 crores. The share, currently trading at Rs 278 has generated a YTD return of 23.09% and is expected to rise even further. With a proposal to convert Madura Fashions into a separate listed entity, and aggressive expansion plans for FY 25, ABFRL looks to shine bright in the Indian apparel industry. 

References:

• Invest India

• Aditya Birla Group

• Pantaloons

• Wikipedia

• ABFRL Annual Report

• Finnovate