The Board of Directors of Aditya Birla Fashion and Retail (ABFRL), at its meeting today, has authorized the management of the Company to evaluate vertical demerger of Madura Fashion & Lifestyle business from ABFRL into a separate listed company.
The proposed demerger will enable the creation of two separately listed companies as independent growth engines with distinct capital structures and parallel value creation opportunities.
The Madura Fashion & Lifestyle business segment (MFL), consisting of four lifestyle brands viz Louis Phillippe, Van Heusen, Allen Solly & Peter England along with casual wear brands viz. American Eagle & Forever 21, sportwear brand Reebok and the innerwear business under Van Heusen will be demerged into a separate listed entity. This portfolio has built a leadership position over a long period of time and has a proven track record of delivering consistent revenue growth, profitability, strong free cash flows and high return on capital. The entity will have a strong balance sheet to power its future growth aspirations. Post necessary approvals, the demerger will be implemented through an NCLT scheme of arrangement, and all shareholders of ABFRL will have identical shareholding in the newly formed entity.
Subsequent to the completion of the proposed demerger, ABFRL will raise growth capital within 12 months to infuse strength into its balance sheet, positioning itself well to pursue the large growth opportunity that lies ahead of it.
The post-demerger portfolio of ABFRL would consist of -
- Value Retail - Value & masstige fashion retail play under Pantaloons & Style Up
- Ethnic Portfolio - One of India's most comprehensive ethnic wear portfolio covering multiple occasions, price points and consumer segments, including designer wear portfolio
- Luxury - A fast-growing bridge to luxury & luxury platform of The Collective, Galleries Lafayette & select luxury brands
- Digital brands - TMRW – a leading portfolio of digital first fashion brands