Arvind Lifestyle Brands, a wholly-owned subsidiary of Arvind Fashions, has signed a definitive agreement to sell its value-fashion retail chain Unlimited to retailer V-Mart Retail Ltd., for an estimated Rs150 crore in an all-cash transaction.
The transaction will include the sale of Unlimited’s 74 value fashion retail stores across South and West India, warehouses and inventory. Arvind Fashions will use the proceeds for debt reduction and for working capital.
In addition, there are contingent payments to be received, based on certain milestones achieved by V-Mart over next few years for these stores, post the acquisition,” Arvind Fashions said in a statement.
In FY21-the company drove cost reduction by 40% or an estimated ₹540 crore across rentals, warehouse, manpower optimization, it said in its Q4 and FY21 investor presentation.
The last fiscal has been particularly challenging for apparel retailers as demand for formal and occasion wear took a beating. In July 2020, Flipkart Group bought a minority stake in Arvind Fashions Ltd’s subsidiary Arvind Youth Brands for Rs260 crore. The company, which owns denim brand Flying Machine, plans to build the brand online and in India’s smaller markets.
Arvind Fashion has been in consolidation mode, offloading and exiting brands and shuttering unviable stores and focusing on power brands.
At the same time, V-Mart—that sells value clothing, accessories and footwear and other products through large format stores and focusses on smaller cities-the acquisition will help it expand footprint in South India. V-Mart has a large presence in northern and eastern.