The country's leading retailer Reliance will acquire the beauty retail business of Arvind Fashion, which also includes the Sephora business operated by the Lalbhai family-promoted firm in India.
As per the deal, Reliance Beauty & Personal Care, a wholly-owned subsidiary of Reliance Retail Ventures Limited (RRVL), will take over 26 stores of the French beauty retail brand from Arvind Fashions Limited, said a joint statement.
"As part of the partnership with Sephora, Reliance Beauty & Personal Care take over the current India operations of Sephora's 26 stores across 13 cities from Arvind Fashions Limited, as it sets in motion a plan to expand Sephora's presence in the country," it said.
Reliance Beauty & Personal Care operates the beauty business for RRVL, which is the holding company of all the retail companies under the RIL (Reliance Industries Limited) group.
Earlier in the day, Arvind Fashion in a regulatory statement said it has "entered into a Share Purchase Agreement (SPA) with Reliance Beauty & Personal Care Ltd, to sell and transfer the entire equity stake held by the company".
RRVL Director V Subramaniam said, "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. The Indian consumerism journey is at a tipping point, providing the perfect tailwind to this partnership."
Upon completion of the formalities under the said SPA, Arvind Beauty Brands Retail would cease to be a subsidiary of the company, according to a regulatory filing from the Ahmedabad-based company.
Over consideration of sales, the company said: "Transaction has been done at an enterprise value of Rs 216 crore towards the sale of the entire equity stake and repayment of loans. The purchase consideration towards the sale of the entire equity stake is Rs 99.02 crore."
Arvind Beauty Brands Retail had a turnover of Rs 336.70 crore in FY23 and contributed 7.60 per cent of the consolidated revenue of Arvind Fashions.
Sephora, headquartered in Paris, is a part of 80 billion Euro LVMH group, a French multinational holding and conglomerate specializing in luxury goods. It had forayed into India in 2012.
Over the development, Sephora Asia President Alia Gogi said, "We are tremendously excited to partner with the largest retail group in India to step-change our business. Rising affluence, increasing urbanization and the proliferation of social media have driven greater awareness of self-care and beauty, unlocking major opportunities for prestige beauty. It is an opportune time for us to invest in expanding our presence, and bring new, exciting, and exclusive brands to delight our growing community of beauty enthusiasts."
This partnership will help us straddle across the value chain in the beauty and personal care segment, he added.
In a separate statement, Arvind Fashion said after this deal, it will emerge as a pure-play branded fashion company. It will focus on growing its 5 marquee industry-leading brands which include U.S. Polo Assn, Tommy Hilfiger, Arrow, Flying Machine and Calvin Klein.
The Indian Beauty and Personal Care (BPC) market is 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 materialize strongly, the report said
India is uniquely positioned as one of the most attractive and fastest-growing BPC markets globally, the report said.