Aditya Birla Fashion and Retail to foray into D2C space, set up a new subsidiary

Aditya Birla Fashion and Retail Limited (ABFRL) on Friday announced its foray into the fast-growing Direct to Consumer (D2C) business through a new subsidiary.

The board of the leading fashion company, in a meeting held on Friday, gave an ''omnibus approval'' to set up a new subsidiary towards building a portfolio of distinct, new-age, digital brands across categories in fashion, beauty and other allied lifestyle segments.

''The D2C portfolio will be built through organic and inorganic means,'' said a statement from the Aditya Birla Group firm.

This venture will initially be funded through ABFRL's internal accruals,'' it added.

''At an appropriate time, the company will look to bring in external capital to accelerate the growth journey,'' said ABFRL, which is a repertoire of leading brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England and own largest fast fashion store brand Pantaloons.

The D2C market opportunity in India is expected to be USD 100 billion by 2025, said ABFRL.

''The newly incorporated entity will organically incubate and also acquire promising and scalable D2C brands. Other than providing growth capital, ABFRL's proposition is built around its strong operational expertise where it will utilise its rich experience and capabilities to scale up this portfolio,'' it added.

ABFRL Managing Director Ashish Dikshit said the company wants to build the next set of iconic brands in the digital space as ''it evolves with our changing consumers''.

''Leveraging our core capabilities around design, product creation, sourcing and brand building that 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,'' he said.

Dikshit further said ABFRL is confident that this foray will successfully meet the aspirations of digitally native customers and also create long-term value for investors and other stakeholders.

''The company will now accelerate the process of building the D2C framework and identifying key talent for this play. ABFRL will look to tap into the broader tech ecosystem and collaborate effectively with its ecommerce partners, tech service providers, digital marketing agencies to scale this business rapidly,'' he said.

ABFRL, which had reported a revenue of Rs 5,181.14 crore in FY22, is India's first billion-dollar pure-play fashion powerhouse operating retail operation in space of 8.4 million sq ft.

As on March 31, 2021, ABFRL has a network of 3,212 stores across approximately 31,000 multi-brand outlets with over 6,800 point of sales in department stores across India.