Aditya Birla Group to buy exclusive rights to sell Reebok products in India
A cyclist rides past a Reebok store in Mumbai, India. (Photo by INDRANIL MUKHERJEE/AFP/GettyImages)
ADITYA Birla Fashion and Retail Limited (ABFRL), an Indian fashion retail company, on Tuesday (14) said it would buy exclusive rights to sell global sportswear brand Reebok’s products in the country’s market both online and offline.
The deal marks ABFRL’s entry into the fast-growing sports and active wear segment in India which has been growing rapidly over the last few years due to the youth’s rising health consciousness and the adoption of active lifestyles. The segment is expected to grow to $13 billon (£9.8 billion) by FY24 at an annual growth rate of 14 per cent.
Following the announcement, the shares of the Mumbai-based firm jumped 4.6 per cent to Rs 279 (£2.78).
Reuters reported that the deal will be effective once the global ownership of Reebok is transferred from Adidas to Authentic Brands Group under an acquisition under 2.1 billion euros (£1.7 billion) announced in August.
A number of top fashion retailers from India have eyed top brands this year with a target of strengthening their positions in one of the country’s quickest growing segments, the Reuters report said.
ABFRL bought 51 per cent stake in luxury wedding wear brand Sabyasachi while rival Reliance Industries Limited retail unit took 52 per cent of designer brand Ritu Kumar.
The retail company said that the Reebok transaction also includes buying certain assets of Reebok India Company, including inventory and liabilities.
It said the long-term licensing deal also gave it exclusive rights to sell Reebok products in India as well as other Southeast Asian nations.
ABFRL is likely to spend around Rs 750 million (£7.4 million) to Rs 1 billion (£10 million) to buy Reebok’s inventory and other current assets and liabilities, the Reuters report said.
ABFRL runs more than 3,000 stores in India and is the exclusive retailer for Forever 21, American Eagle Outfitters and Ralph Lauren branded clothes and others in the country.
(With PTI inputs)