Arvind Fashions to sell Sephora to Reliance

Category: GARMENTS

Country: India

Region: South Asia

3rd November 2023

Arvind Fashions is selling its beauty brands division, which sells products from the LVMH-owned beauty chain Sephora, to Mukesh Ambani's Reliance Retail for Rs 99 crore ($11.89 million). Arvind Fashions had partnered with the French brand for the last eight years.

The company will use proceeds from the deal to invest in its brands and repay debt.

The deal enhances Reliance's collection of global brands, following earlier reports of Sephora and Reliance Retail abandoning talks about an Indian retail partnership. This agreement was valued at Rs 216 crore, leading to an 11.5% surge in Arvind Fashions' shares.

"We are excited and proud to partner with Sephora, a global leader in beauty. The burgeoning Indian beauty market is being propelled by a new generation of customers with a strong desire to express their individuality, rising aesthetic refinement and a growing number of women in the young workforce of India," said V Subramaniam, Director, Reliance Retail Ventures Limited.

RRVL serves as the umbrella company for all retail entities within the Reliance Industries Limited (RIL) group.

The beauty division, which includes Sephora, contributed Rs 337 crore to Arvind Fashion's fiscal 2023 revenue, accounting for about 7.6% of the total.

"We are tremendously excited to partner with the largest retail group in India to step-change our business. Rising affluence, increasing urbanisation and the proliferation of social media have driven greater awareness of self-care and beauty, unlocking major opportunities for prestige beauty. It is an opportune time for us to invest in expanding our presence, and bring new, exciting, and exclusive brands to delight our growing community of beauty enthusiasts," said Alia Gogi, Asia President, Sephora.

Reliance Retail, the top retailer in the nation, faces competition from brands such as Lakme by HUL, Nykaa, Tata, and Sephora by LVMH in India's expanding beauty and personal care market.

According to a joint report by Redseer Strategy Consultant and Peak XV (formerly Sequoia Capital India & Southeast Asia) - the Indian beauty and personal care market is estimated to grow to USD 30 billion by 2027, accounting for 5 per cent of the global market, according to a report.

The Indian Beauty and Personal Care (BPC) market -- estimated to be around USD 19 billion in 2022 -- has very low per capita spend in the category but as the country prospers, the growth headroom will materialise strongly, the report said

India is uniquely positioned as one of the most attractive and fastest-growing BPC markets globally, the report said.

Shares of Arvind Fashions surged 11.5% after the news, before trimming some gains to close 5.8% higher.

Courtesy: Msn.com