Aditya Birla Fashion steps up presence in ethnic wear after Sabyasachi deal

Ties up with designer Tarun Tahiliani; second deal in a month

Aditya Birla Fashion and Retail on Wednesday said it was typing up with designer Tarun Tahiliani to form a new entity. This entity would soon launch a men's ethnic wear brand in the marketplace. 

This is the second deal by Aditya Birla Fashion in a month. In January, the company acquired a 51 per cent stake in designer brand Sabyasachi for Rs 398 crore, as it sought to grow its presence in ethnic wear. 

In the last two years, Aditya Birla Fashion has picked up stakes in Shantanu & Nikhil and etailer Jaypore.com for Rs 60 crore and Rs 110 crore respectively.

The new brand, to be launched in partnership with Tahiliani, aims to build a Rs 500 crore business in the next 5 years. It will set up over 250 stores across the country and will launch the first retail store by September this year. 

In a statement, the company said it would hold 80 per cent stake in the new entity. Tahiliani would hold the remaining 20 per cent stake in the firm. As part of the deal, Aditya Birla Fashion would also pick up a 33 per cent stake in the existing luxury fashion business of Tahiliani, with the option to increase it to 51 per cent in the next few years.

Ashish Dikshit, managing director, Aditya Birla Fashion, said that ethnic wear would become an important category in the future, as Indians rediscovered their heritage.  

"Tarun Tahiliani has been at the forefront of the emergence of the Indian design industry. Launching a new brand with him will give the Indian consumer a new range of celebration wear," he said. 

The ethnic wear market, according to retail consultancy Technopak, is pegged at Rs 70,000 crore in size. 85 per cent of this market comprises women's wear, growing at 10 per cent per annum. However, the men's ethnic wear segment though smaller in size is growing at double the rate of growth, the consultancy said. 

Analysts tracking the company say that ethnic wear was a gap in the retailer's portfolio, which it sought to plug with its aggressive push into the segment. 

Prior to this, the company was known largely for its western wear, both in the formal and casual wear domains, targeted at men and women. 

The fashion retailer closed FY20 with revenue of close to Rs 9,000 crore and a network of over 3,000 stores. FY21 has seen the company raise money through a qualified institutional placement and has been aggressively beefing up its online and offline presence.