Aditya Birla Fashion and Retail (ABFRL) is eyeing to vertically demerge its Madura Fashion & Lifestyle business into a separate listed entity. The Board of Directors of ABFRL at its meeting held on April 01, 2024, has authorized the management of the company to evaluate vertical demerger. 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.
Post demerger, the remaining ABFRL will be focused on high-growth segments where there are tailwinds from a shift from unbranded to branded, premiumization, rise of super premium & luxury, and rapid growth in Gen Z focused digital first brands. This is an attractive portfolio comprising of multiple high growth segments in large addressable markets with strong value creation opportunities.
Aditya Birla Fashion and Retail is engaged in providing branded fashion apparels and accessories, and the retail sale of clothing, footwear and leather articles in stores. It operates through two segments: Madura Fashion & Lifestyle, and Pantaloons. The company's brands include Louis Philippe, Van Heusen, Allen Solly and Peter England.
| Company Name | CMP |
|---|---|
| Avenue Supermarts | 4607.00 |
| Aditya Birla Fashion | 262.95 |
| Trent | 4415.60 |
| Future Retail | 2.27 |
| Electronics Mart Ind | 210.00 |
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