Apparel retailer Aditya Birla Fashion and Retail on Monday said it plans to demerger Madhura Fashion & Lifestyle into a separate listed company.
The move comes after the company posted losses in the past three quarters due to weak demand and increased investment in some brands.
According to its latest quarterly financial report, Madura Fashion is comprised of four lifestyle brands – Louis Philippe, Van Heusen, Allen Solly and Peter England, which account for more than 70% of the company's total revenue. is occupying.
Following the demerger, Aditya Birla Fashion said it would focus on luxury and premium brands such as Ralph Lauren and Fred Perry, while aiming to raise growth capital within 12 months to strengthen its balance sheet.
It will also enable the apparel retailer to strengthen its focus on pantaloons, which will be separated from Madura Fashion, which combines brands in lifestyle, fast fashion, athleisure casual sports clothing and innerwear.
“There is scope to re-evaluate the capital structure to optimize various parts of the portfolio,” Aditya Birla Group Chairman Kumar Mangalam Birla said.
The company said all investors will hold identical shares in the newly formed entity.
ABFRL stock is down 5.4% so far this year after falling 22% last year, while rival Torrent's stock is up 27.5% after more than doubling last year.
Written by Manvi Pant
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