Arvind Lifestyle Brands, a wholly owned subsidiary of Arvind Fashions Limited (AFL), has signed definitive agreements for strategic sale of assets of its Unlimited retail business to V-Mart Retail in an all-cash transaction deal.
Commenting on the transaction, Lalit Agarwal, Managing Director, V-Mart Retail Limited, said, “VMart is one of the strongest players in northern and eastern India and is a leading value retail player for the masses in the fashion segment, primarily operating in Tier 2, 3 cities. We are proud to bring the ‘Unlimited’ stores within the umbrella of the V-Mart family.”
Unlimited operates a chain of 74 value fashion retail stores across South and West India and retails fashion apparel and accessories for men, women and children at affordable prices.
“As part of the transaction, Arvind Lifestyle Brands will sell assets of the 74 retail stores, warehouses, inventory and the ‘Unlimited’ brand to V-Mart at its book value,” the company said on July 22.
Arvind Lifestyle Brands would receive cash consideration estimated at about Rs 150 crore upon the closure of the transaction and thus, will fully recover the capital employed in the business.
“In addition, there are contingent payments to be received, based on certain milestones achieved by V-Mart over next few years for these stores, post the acquisition. The company intends to utilise the amount so received for repayment of debt and working capital purposes,” informed Arvind Lifestyle Brands
Speaking on this divestment, Shailesh Chaturvedi, Chief Executive Officer, Arvind Fashions, said, “We are delighted to find a strong home in V-Mart for Unlimited. We had created a scalable format with significant product capabilities in value retail, which has a large potential. However, in line with our strategy of focusing on our six high conviction brands, we decided to exit the business. This would help us put capital behind growing our six focus brands, helping generate significant shareholder value.”
According to the company, this sale will help AFL achieve its objective of focusing on its six high conviction brands which include US Polo Assn., Tommy Hilfiger, Arrow, Flying Machine, Calvin Klein and Sephora.
The completion of the transaction is subject to necessary approvals and customary closing conditions, the company informed.