Arvind Fashions has sold its Sephora India business to Reliance Retail for Rs 99 crore ($11.89 million). The deal was made at an enterprise value of Rs 216 crores, Arvind Fashions said in a regulatory filing.
The sale of the Sephora India business is part of Arvind Fashions' broader strategy to focus on its core apparel business. The company has been struggling in recent years and is looking to divest of non-core assets.
The deal between Arvind Fashions and Reliance Retail to sell the Sephora India business to Reliance Retail is significant because it will boost Reliance's portfolio of international brands and comes months after local media reported that Sephora and Reliance Retail had abandoned talks to form a retail partnership for the Indian market.
Reliance Retail launched its own beauty retail platform, Tira, in April to take on the likes of Nykaa and the Tata Group.
As part of the partnership with Sephora, Reliance Beauty & Personal Care Limited will take over the current India operations of Sephora's 26 stores across 13 cities from Arvind Fashions Limited. During this period of transition, the stores and website will be operating business as usual.
Shares of Arvind Fashions surged 11.5 per cent after the news, trimming some gains to last trade up 7.3 per cent.
The beauty division that hosted Sephora reported a revenue of Rs 337 crores in fiscal 2023, or about 7.6 per cent of Arvind Fashion's total revenue.
"We are excited and proud to partner with Sephora, a global leader in beauty. The burgeoning Indian beauty market is being propelled by a new generation of customers with a strong desire to express their individuality, rising aesthetic refinement and a growing number of women in the young workforce of India," said V Subramaniam, Director, Reliance Retail Ventures Limited.
Reliance Retail competes with brands such as Lakme by HUL, Nykaa, Tata, and Sephora by LVMH in India's expanding beauty and personal care market.
As per a joint report by Redseer Strategy Consultant and Peak XV (formerly Sequoia Capital India & Southeast Asia) - the Indian beauty and personal care market is expected to grow to $30 billion by 2027, accounting for 5 per cent of the global market, according to a report. The Indian Beauty and Personal Care (BPC) market -- estimated to be around $19 billion in 2022 -- has very low per capita spend in the category but as the country prospers, the growth headroom will materialise strongly, the report said
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