Aditya Birla Group backed ABFRL announces foray into D2C play

ABFRL backed by the Aditya Birla Group has received board approval to create a subsidiary that will incubate and acquire D2C brands, scaling them online

Aditya Birla Group backed Aditya Birla Fashion and Retail Limited (ABFRL) announced board approval to set up a new subsidiary focused on Direct-to-Consumer (D2C) business, with a focus on brands in the fashion and beauty verticals.

The D2C business of ABFRL will be initially funded through the parent’s internal accruals with plans of bringing in external capital to accelerate the growth of the subsidiary.

With this announcement, ABFRL is targeting the ecommerce roll-up model, which has seen the emergence of startup unicorns valued at over $1 billion over the last year, including the likes of Mensa Brandsand GlobalBees. US-headquartered Thrasio, which has been a leading name in ecommerce roll-up business globally, also marked its entry into India earlier this year, with a commitment of investing up to Rs 3,750 crore in India to acquire promising digital brands.

The D2C business of ABFRL will build a portfolio of digital-first brands both organically and through inorganic means, said a statement issued by the company. The new subsidiary will acquire and scale promising D2C brands, collaborating with ecommerce partners, tech service providers, and digital marketing agencies to grow its portfolio.

“At ABFRL, we want to build the next set of iconic brands in the digital space as we evolve with our changing consumers. Leveraging our core capabilities around design, product creation, sourcing, and brand building have enabled us to create some of India’s most loved fashion brands in the offline space. We now wish to craft a blockbuster portfolio in the digital space as well,” said Ashish Dikshit, Managing Director at ABFRL, in the statement.

This isn’t ABFRL’s first foray into the online commerce space. It had decided to shut down its ecommerce venture, ABOF (All About Fashion), in 2017.

ABFRL, which has a network of 3,370 stores owns and operates fast-fashion chain Pantaloons, also houses brands such as Louis Philippe, Van Heusen, Allen Solly, and Peter England, apart from retailing international brands such as Simon Carter, American Eagle, Ralph Lauren, Ted Baker, and others. The company’s ethnic wear brands include Tasva, Jaypore apart from strategic partnerships with designers Shantanu & Nikhil, Tarun Tahiliani and Sabyasachi.

The company reported a 44 percent growth in revenue for the quarter ending December 31, 2021, with a revenue of Rs 2,987 crores, and EBITDA of Rs 609 crore for Q3 of 2021-22.

As part of its filings, ABFRL said, “The onset of wave three has affected current market conditions and we expect normalcy to return in the following months as the pandemic wears down.”

It further added, “Moving forward, ABFRL will look to expand into segments and businesses that are inherently more digital in nature, in sync with the consumer trends in fashion.”

The company did not comment on queries regarding who will lead the D2C subsidiary till the time of publishing the article.

Edited by Kanishk Singh


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