Aditya Birla Fashion to separately list Louis Phillippe, Van Heusen brand operator

Split and spin off: Apparel retailer Aditya Birla Fashion and Retail (ABFRL) announced plans on April 1 to demerge its Madura Fashion & Lifestyle division into a distinct listed company.

The decision comes in the wake of ABFRL facing losses over the last three quarters, attributed to soft demand and increased investments in certain brands.

Madura Fashion comprises four prominent lifestyle brands – Louis Phillippe, Van Heusen, Allen Solly, and Peter England – contributing over 70% of the company's total revenue, as per its latest quarterly financial report.

Following the demerger, Aditya Birla Fashion intends to concentrate on luxury and premium brands such as Ralph Lauren and Fred Perry, while seeking to raise growth capital within the next 12 months to fortify its financial position.

This strategic move will also enable the retailer to enhance its focus on Pantaloons, which will be separated from Madura Fashion and encompasses a mix of lifestyle, fast fashion, athleisure, casual sports clothing, and innerwear brands.

Aditya Birla Group Chairman Kumar Mangalam Birla highlighted the opportunity to reassess capital structures to optimise various segments of the portfolio.

The company stressed on all its investors maintaining identical shareholding in the newly established entity.

ABFRL's shares have declined by 5.4 per cent year-to-date, following a 22 per cent decrease last year, contrasting with rival Trent's shares, which have risen by 27.5 per cent this year, following more than doubling in value last year.

(With Reuters Inputs)