Flipkart’s Strategic Exit: Sells 6% Stake in Aditya Birla Fashion via Block Deal

Flipkart Investments, a subsidiary of Flipkart Pvt Ltd, has completely exited Aditya Birla Fashion and Retail (ABFRL) by selling its 6% stake through block deals worth ₹583 crore. The transaction involved selling 7.31 crore equity shares at a floor price of ₹79.50 per share, which was a 7.6% discount compared to ABFRL's closing price of 86 on the NSE.

Following the stake sale, ABFRL's shares plunged nearly 11%, trading at 76.94 apiece on the NSE. Goldman Sachs acted as the sole bookrunner for the deal. Flipkart's exit marks a complete divestment from ABFRL, which owns brands like Pantaloons, Van Heusen, and Louis Philippe.

As Flipkart is owned by Walmart, the decision could align with Walmart’s broader global strategy, possibly shifting focus to other high-growth areas.

Flipkart initially invested ₹1,500 crore in ABFRL in 2020, likely as part of a broader retail strategy. The exit suggests the investment has run its course. The stake sale was executed at a 7.6% discount to ABFRL’s closing price, indicating a calculated move to liquidate holdings amid market fluctuations.

While ABFRL has narrowed its net loss in Q4FY25 (₹23.55 crore vs. ₹266.36 crore in Q4FY24), Flipkart may have reassessed its long-term growth prospects in the fashion retail segment.

Flipkart’s exit from Aditya Birla Fashion & Retail (ABFRL) signals a strategic shift in its retail investments, while ABFRL undergoes structural changes to refine its market positioning.

This ₹582 crore divestment could be redirected towards strengthening Flipkart’s private labels, expanding grocery and electronics verticals, or enhancing supply chain capabilities. Flipkart might explore collaborations with emerging fashion-tech startups or global brands to diversify its offerings.

Post-demerger, ABFRL is expected to prioritize Pantaloons, ethnic wear, and digital-first brands leveraging e-commerce and omnichannel strategies.

ABFRL recently spun off its lifestyle brands into Aditya Birla Lifestyle Brands Limited (ABLBL), housing premium labels like Louis Philippe, Van Heusen, and Allen Solly. This move aims to sharpen brand focus and improve profitability.

Abof.com To Shut Shop By Year End

In a shocker of a news, Aditya Birla Group’s fashion e-commerce platform Abof.com has decided to shut its shop by the end of 2017, according to a report in the Economic Times.

Aditya Birla Online Fashion started its operations two years ago in October 2015. The platform lists clothing and accessories for men and women, both from Aditya Birla’s brands as well as clothing curated from other brands. Last year, global ecommerce giant Amazon ended up adding Abof.com as a seller on its marketplace.

Reportedly, the company has already informed all of its 240 employees about the decision and has finalised December 31, 2017 as its last day of operations. The employees have an option of either accepting four-and-half months’ salary as a severance package and leave the organisation or continue being a part of the Aditya Birla Group in some other department other than Abof. Reportedly, November onwards they will also start closing down their stocks.

Aditya Birla’s director of human resources Santrupt Misra confirmed ET about the development. He further shared that the news shouldn’t come as much of a shock since most ecommerce players in the country are currently finding it hard to survive and it is time to realise that there’s something wrong with the segment.

Aditya Birla Group started Abof saying the platform would not offer discounts and, instead, sell a more limited and fashionable range of merchandise. In an interview in March, chief executive Prashant Gupta had told ET that their “target consumer is not the guy who is looking for a deal”.

Interestingly, Aditya Birla had earlier launched another e-commerce platform called TrendIN.com in 2013. The group used the platform to sell its in-house brands such as Van Heusen, Louis Philippe, Allen Solly, Pantaloons, People, Peter England and Planet Fashion. However, it ended up shutting down this platform and started its separate online platforms for individual brands.

A Fashion Portal Driven by Tech

Aditya Birla’s abof is an online fashion store that has chosen a different approach to sell fashion. Over the last two years, its market share has grown on the back of a feature heavy shopping experience that allows site visitors to learn trends and get personalized content aimed at their individual styles. The fashion portal features celebrity news, international trends and tech features that blur the line between online and physical shopping.

Here are some of the unique attributes that are changing the face of apparel shopping in India.

Virtual Reality Change Room

The biggest drawback of online shopping is often considered to be the lack of the physical verification, especially when trying to identify the right fits and sizes. Size charts are left redundant due to the sheer variety of brands, different size calibrations and designs. The 3D change room feature of abof was set up with London-based online fitting company, Metail. Customers get to choose avatars and fill in their basic measurements, after which they can click on a range of specially photographed garments to see the fitting. This feature is also expected to reduce returns rates, a double benefit resulting in more happy customers and less waste of resources for the company.

Visual Search

Abof’s visual search feature addresses a conundrum often faced by the avid shopper. There are times when we see a garment but cannot get its exact details like brand or label, making it an absolute time-consuming process to sift through entire inventories. With this smart feature, you just need to upload a clear picture of the product, and if it is in the abof inventory, a match will be showed and you can buy that product online.

Personalized Feed

Abof encourages users to explore new trends and styles for a truly genuine fashion shopping experience. Its personalised feed feature tracks your choices and ensures that you get landing page content based on your personal fashion. The What’s Hot feature is a source of the latest tips, trends and styles curated especially for you, based on what you like.

Delivery on a Sunday

Sometimes you have instances where your package has arrived in your town, but because it is the weekend you have to wait longer. Why experience the hassle of accepting your package on a busy Monday when you have all of Sunday? abof has now added Sunday deliveries to its roster of features that ensure a convenient end-to-end shopping experience for everyone.

Hassle-Free Returns, Quick Refunds

Returns have always been the area that causes shoppers the most tension. One touch returns and a 24-hour refund policy means that you do not have to fret over your purchase for too long if it does not satisfy you. This feature adds to the end-to-end customer focused approach that abof is gradually building on.

Currently, abof has more than 120 brands including exclusive in-house products and celebrity labels like SKULT, a Shahid Kapoor production. From athleisure clothing to fusion ethnic formals, the site has it all covered along with customised features and tech-powered shopping experiences.

Aditya Birla Fashion Acquires Forever 21 in India for $26M to Create a Strong Foothold in the Womenswear Business

Aditya Birla Fashion and Retail (ABFRL) has announced that it will acquire global clothing brand ‘Forever 21’ in the Indian market for $26 million (around Rs.175.52 crore).

“The company has on Tuesday executed a business transfer agreement with Diana Retail and DLF Brands for acquisition of the business undertaking of Diana Retail. Under the Forever 21 brand and also through eCommerce channel on a going concern basis, in the Indian market,” ABFRL said in a BSE filing.

Diana Retail is the franchisee of Forever 21 brand in India. Sharing details of the acquisition, the company said: “The transaction involved acquisition of the Forever 21 undertaking of Diana Retail with effect from 1 July through a business transfer agreement not share transfer.”

In May this year, ABFRL announced its plans to enter into a binding MoU with Forever 21 to acquire its online and offline rights for the Indian market.

Forever 21 is among the fastest growing fashion retailers in the world with a network of more than 700 stores worldwide. Its India operations reported a turnover of Rs.262 crore in 2015-16.

ABFRL was formed after the consolidation of the branded apparel businesses of Aditya Birla Group, comprising Aditya Birla Nuvo, Madura Fashion division and ABNLs subsidiaries—Pantaloons Fashion and Retail Ltd and Madura Garments Lifestyle Retail Company Ltd in May 2015.

Post consolidation, PFRL was renamed as Aditya Birla Fashion and Retail, with over 7,000 points of sale in over 375 cities and towns.

With the acquisition of Forever 21 India business, ABFRL aims to create a strong foothold in the womenswear business in the western wear segment. Currently, the western womenswear segment is growing at more than 20 per cent. The proposed acquisition will further strengthen leadership position of ABFRL in the branded fashion space.

The young demographics of the country and emergence of fast fashion segment offers opportunity for rapid growth for the brand, said Jatin Malhotra, Director, Global Expansion, Forever 21.