Aditya Birla Fashion to list flagship lifestyle brands as separate entity

Apparel retailer Aditya Birla Fashion and Retail (ABFRL), opens new tab said on Monday it was planning to demerge Madura Fashion & Lifestyle into a separate listed entity.

The move follows the company posting losses for the last three quarters due to weak demand as well as increased investments in some brands.

Madura Fashion consists of four lifestyle brands – Louis Phillippe, Van Heusen, Allen Solly and Peter England – and contributes to more than 70% of the company’s total revenue, according to its latest quarterly earnings report.

After 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 in 12 months to beef up its balance sheet.

It will also allow the apparel retailer to increase its focus on Pantaloons, which will be separated from Madura Fashion that houses a mix of lifestyle, fast fashion, athleisure casual sports clothing and innerwear brands.

“There is scope to re-evaluate capital structures to optimize different parts of the portfolio,” Aditya Birla Group Chairman Kumar Mangalam Birla said.

The company said all its investors will have identical shareholding in the newly formed entity.

ABFRL’s shares have lost 5.4% so far this year after shedding 22% last year, while those of rival Trent have added 27.5% after more than doubling last year.