Ambani's Reliance Likely To Acquire Sephora Retail Division From India's Arvind Fashions For Rs 99.02 Crore

Reliance Beauty & Personal Care Limited (RBPCL), a wholly owned subsidiary of Reliance Retail Ventures Limited (RRVL) is expected to acquire Arvind Beauty Brand Retail Limited (ABBRL) which runs its Sephora India business, in an all-cash transaction. Arvind Beauty Brand Retail Limited is a wholly owned subsidiary of Arvind Fashions Limited (AFL).

In an exchange filing on Friday, Arvind Fashions said, "Arvind Fashions Limited (AFL), India's leading casual and denim player, has signed definitive agreements with Reliance Beauty & Personal Care Limited (RBPCL) to sell its wholly owned subsidiary Arvind Beauty Brand Retail Limited (ABBRL) which runs its Sephora India business, in an all-cash transaction."

RBPCL is a wholly owned subsidiary of Reliance Retail Ventures Limited."

In a separate exchange filing, the company said that the Transaction has been done at an enterprise value of Rs 216 Crores towards the sale of the entire equity stake and repayment of loans. It said that the purchase consideration towards the sale of the entire equity stake is Rs 99.02 Crores.

Arvind Beauty Brand Retail Limited retails products of LVMH-owned beauty chain Sephora.

According to the company, AFL intends to utilize the proceeds to invest in the growth of its brand portfolio and repayment of debt. With this sale, AFL will emerge as a pure-play branded fashion company and will further sharpen its focus on profitably growing its 5 marquee industry-leading brands which include U.S. Polo Assn., Tommy Hilfiger, Arrow, Flying Machine, and Calvin Klein.

Sephora operates 26 stores across the country offering prestige beauty products across categories such as makeup, skincare, fragrance, and haircare.

Commenting on this transaction, Shailesh Chaturvedi, Chief Executive Officer, Arvind Fashions, said, "We are proud to have scaled up Sephora India business from 4 stores to 26 currently, delivering one of the highest sales productivity in premium beauty in India and would like to thank Sephora for their partnership. This transaction will help AFL put capital behind growing our 5 high conviction brands and accelerate the journey towards higher free cash flow and return on capital employed."

"We are equally grateful to Arvind for their partnership over the past eight years to get us positioned for the next stage of growth," said Alia Gogi, Asia President, SEPHORA.

Indian beauty and personal care market size:

The Indian beauty and personal care market pegged at USD 17 billion and set to grow at a 11% CAGR, is still believed to be in its infancy; positioning India as one of the largest untapped consumer markets globally.

Today, the share price of Arvind Fashions closed 5.81% higher at Rs 344.40 per share. Meanwhile, Reliance Industries shares remained mostly unchanged at Rs 2319.05 per share on Friday.