Arvind Fashions Ltd. recently announced the sale of its entire stake in Arvind Beauty to Reliance Retail’s subsidiary, Reliance Beauty and Personal Care. This deal significantly impacts the Reliance Fashion Share Price and the overall Indian beauty market. The transaction was valued at an enterprise value of Rs 216 crore, with the equity stake priced at Rs 99.02 crore. The sale includes the repayment of outstanding loans associated with Arvind Beauty.
Upon completion of the agreement, Arvind Beauty will no longer be a subsidiary of Arvind Fashions, and Reliance Beauty Brands will gain exclusive access to Arvind Fashion’s beauty brands, including the prestigious Sephora. This partnership will allow Reliance Beauty to exclusively develop and expand Sephora’s presence in India across various channels.
In a separate statement, Reliance Retail emphasized the shared vision of both companies to shape the future of prestige beauty retail in India. This strategic alliance allows Reliance to leverage Sephora’s global reputation and Arvind Fashion’s established presence in the Indian market.
Arvind Beauty Brands Retail contributed Rs 337 crore in the previous fiscal year (2022-23), representing 7.60% of Arvind Fashions’ consolidated revenue. The net worth of Arvind Beauty in FY23 was Rs 10.6 crore, accounting for 1% of the parent company’s consolidated net worth. This divestiture allows Arvind Fashions to streamline its operations and potentially focus on its core apparel business.
Arvind Fashions, headquartered in Bengaluru, is a dominant player in India’s casual and denim retail sector. The company boasts a diverse portfolio of international and domestic brands, including US Polo Assn., Arrow, Tommy Hilfiger, Calvin Klein, and Flying Machine, catering to a wide range of consumer preferences and price points. The company operates across various segments, including lifestyle brands, value fashion, and until this sale, prestige beauty.
While the year-to-date stock performance for Arvind Fashions has remained relatively flat, with a marginal 1% increase, the implications of this deal on reliance fashion share price are yet to be fully realized. The market will be closely watching how this strategic move impacts both Reliance Retail and Arvind Fashions in the long term. The divestment of the beauty business could potentially lead to increased focus and investment in Arvind Fashion’s core apparel brands, ultimately affecting its stock performance.
