MUMBAI: Aditya Birla Fashion and Retail Monday decided to demerge it’s subsidiary Madura Fashion & Lifestyle into a separate entity and take it public with a view to create two growth engines and help deploy capital more efficiently.
In a statement, the AV Birla group said the board of Aditya Birla Fashion has authorized the management to evaluate a vertical demerger of Madura Fashion from the former into a separate listed company.
Madura Fashion runs four lifestyle brands viz Louis Phillippe, Van Heusen, Allen Solly and Peter England along with casual wear brands American Eagle & Forever 21, sportwear brand Reebok and the innerwear business under Van Heusen. These businesses will now be demerged into a separate listed entity, the statement said without offering a timeline or a likely valuation. The company claimed that this portfolio currently has been delivering consistent revenue growth, profitability, strong free cash flows and high return on capital. But the statement didn’t offer any numbers.
Post-demerger, ABFRL will focus on high-growth segments where there are tailwinds from a shift from unbranded to branded, premiumization, rise of super premium and luxury, and rapid growth in Gen Z focused digital first brands, it said.
Post-demerger ABFRL will consist of the value retail brands under Pantaloons and Style Up; the ethnic portfolios; the luxury segment under the Collective, Galleries Lafayette and a few select other luxury brands; apart from the digital brands under TMRW label.