Business News, Strategy, Finance and Corporate Insight

Business News, Strategy, Finance and Corporate Insight

“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,” it says in a BSE filing.

The Madura Fashion & Lifestyle business segment (MFL), which consists of four lifestyle brands – Louis Phillippe, Van Heusen, Allen Solly, and Peter England – along with casual wear brands such as American Eagle & Forever 21, 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 a National Company Law Tribunal (NCLT) scheme of arrangement, and all shareholders of ABFRL will have identical shareholding in the newly formed entity, the release highlights.

Kumar Mangalam Birla, Chairman, Aditya Birla Group, says, “Over the years, our fashion and retail business has grown from 5 brands in 2 categories, to a dynamic portfolio of 20+ brands across all lifestyle categories. The evolution of this portfolio has seamlessly mirrored the shift in consumption trends, with a play encompassing all large value creation opportunities.”

“As the platform embarks on its next transformational phase of growth, there is scope to re-evaluate capital structures to optimize different parts of the portfolio. The move towards a more simplified and streamlined architecture is designed to unlock distinct opportunities for value creation. This strategic realignment is poised to significantly enhance long-term stakeholder value,” he added.

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