Aditya Birla Fashion Surges 5% On Buying Exclusive Rights To Reebok
Aditya Birla Fashion and Retail Ltd. (ABFRL) shares surged five per cent to hit an intraday high of Rs 278.10 after the company said on Tuesday that it had in-principal approved buying exclusive online and offline rights to the global sportswear brand Reebok for the Indian market.
The deal will be effective once the global ownership of the Reebok brand is transferred from Adidas to Authentic Brands Group under a 2.1 billion euros ($2.37 billion) acquisition announced in August.
Major fashion retailers have gone on a shopping spree for big brands this year, aiming to strengthen their positions in one of the country's fastest growing segments. ABFRL picked up a 51 per cent stake in luxury wedding wear brand Sabyasachi, while rival Reliance Industries' retail unit bought 52 per cent of designer label Ritu Kumar.
"India's leading fashion company, today announced the signing of a long-term licensing agreement, which grants ABFRL exclusive rights to distribute and sell Reebok products through wholesale, e-commerce and Reebok branded retail stores in India and other ASEAN countries," Aditya Birla Fashion and Retail said in a press release.
The deal marks Aditya Birla Fashion's foray into fast-growing sports and active wear segment which is expected to grow to $13 billion by financial year 2024 at an annual growth of 14 per cent, the company said.
"Reebok is one of the leading brands in the sporting goods industry globally and has built a very strong presence in the Indian market over the last two decades. In partnership with ABG, we plan to accelerate Reebok's business in India, combining its global appeal and salience amongst Indian youth. This transaction further strengthens the ABFRL portfolio and increases our ability to engage with consumers across various need spaces," said Ashish Dikshit, managing director at ABFRL.
As of 11:28 am, Aditya Birla Fashion was trading 4.36 per cent higher at Rs 277.65, outperforming the Sensex which was down 0.6 per cent.
