The Flipkart Group has invested Rs 260 crore in retail major Arvind Fashions (AFL) for a significant minority stake in AFL's recently formed subsidiary Arvind Youth Brands. This subsidiary owns the Flying Machine brand.
Through this investment, the Flipkart Group and Arvind Fashions will work collaboratively to identify opportunities and synergies to innovate and develop products with strong value propositions at attractive price points for Flying Machine.
This deal comes a day after ET reported that the fashion and apparel sector in India has only recovered 35% of its sales as compared to sales in January, while online fashion recovered sales to about 64% of January numbers by mid-June.
The partnership with the Flipkart Group will help Arvind accelerate its online growth strategy as it focuses its efforts on developing an omni-channel retail approach for Arvind Youth Brands and Flying Machine.
"Given the strong existing relationship with the Flipkart Group, and their presence in online fashion, it was an obvious choice for us to enter into this engagement through which Flipkart and Myntra will be our preferred online partner for the Flying Machine brand, while we continue to grow our offline sales through channels like exclusive brand stores, department stores and multi-brand stores,” J. Suresh, Managing Director and Chief Executive Officer of Arvind Fashions, said in a statement.
Flying Machine has been retailing on the Flipkart Group platforms of Flipkart and Myntra for more than six years.
Speaking on the investment, Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group, said, "Flying Machine is a brand that is known in households across India, popular with the youth and synonymous with value and style. Through this investment, we look forward to partnering with the team at Arvind Youth Brands to continue to grow the market for its portfolio of products and enhance the strong brand equity that has been built over the last few decades."
The transaction is subject to customary conditions precedent.