Aditya Birla Fashion & Retail (ABFRL) rose 11.93% after the company's board of directors approved the vertical demerger of the Madhura Fashion & Lifestyle business from the company to be evaluated as a separate listed company 236.95 rupees.
The Madura Fashion & Lifestyle business segment (MFL) operates four lifestyle brands including Louis Philippe, Van Heusen, Allen Solly and Peter Englund, as well as casual wear brands such as American Eagle & Forever 21, and sportswear brands Reebok and Van It consists of the innerwear business under its umbrella. Huizen will be split into a separate listed company.
The proposed demerger would enable the creation of two separately listed companies as independent growth engines with different capital structures and parallel value creation opportunities.
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After the company split, the company will focus on high-growth segments driven by the shift from unbranded to branded brands, premiumization, the rise of super-premium and luxury, and the rapid growth of digital-first brands focused on Gen Z. Become. This is an attractive portfolio consisting of multiple high-growth segments in large addressable markets with strong value creation opportunities.
The company is well-positioned to raise growth capital within 12 months to inject strength to its balance sheet following completion of the proposed separation and to pursue the significant growth opportunities before it. said.
Kumar Mangalam Birla, Chairman, Aditya Birla Group, said: “Over the years, our fashion and retail business has grown from five brands in two categories to a dynamic portfolio of more than 20 brands across all lifestyle categories.” The evolution of this portfolio is driven by consumer trends. It seamlessly reflects changes in the industry and covers all major value creation opportunities.
The platform is embarking on the next transformational phase of its growth and there is scope to re-evaluate its capital structure to optimize different parts of its portfolio. The move to a simpler and more streamlined architecture is designed to create clear opportunities for value creation. This strategic realignment is expected to significantly increase long-term stakeholder value.
Dr. Ashish Dikshit of Aditya Birla Fashion and Retail says, “We are proud to be a part of the 2018-2020 Fashion and Retail industry. Each of these businesses has always operated autonomously under their respective CEOs. He added that India's fashion and apparel sector is a $100 billion-plus sector and is expected to see double-digit long-term growth. The simple structure positions the business for sustainable growth and value creation.
The company reported a consolidated net loss of Rs 107.6 crore in Q3 FY24 as against a net profit of Rs 1,121 crore in Q3 FY23. Operating revenue for the quarter rose 16.1% year-on-year to Rs 4,166.71 crore.
Aditya Birla Fashion and Retail (ABFRL) is engaged in the business of manufacturing and retailing branded apparel and operates a chain of retail apparel and accessories stores in India. As of December 31, 2023, the company had 9,781 points of sale in department stores across India and a network of 4,753 stores across approximately 37,106 multi-brand outlets.
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