In order to expand beauty retail in India, beauty retailer Sephora has broken off its eight-year collaboration with Arvind Fashions Ltd and shifted its focus to Reliance Beauty & Personal Care Ltd, a fully owned subsidiary of Reliance Retail Ventures Limited (RRVL).
Through the new agreement, RRVL will have the sole right to expand Sephora’s current beauty line and increase its channel reach in India under the Tira retail brand.
Reliance Beauty & Personal Care Ltd will take over from Arvind Fashions Ltd. the present management of Sephora’s 26 outlets spread across 13 cities in India as part of the relationship with the retail giant.
The websites and stores will continue to run normally during this time of change. September of last year marked the first time that Mint had announced the deal’s completion.
The sale of the full equity stake and loan repayment have been completed at an enterprise value of ₹216 crore. ₹99.02 crore is the purchase consideration for the sale of the whole equity share.
According to a statement, AFL plans to use the money to pay down debt and expand its portfolio of brands. “AFL will become a pure-play branded fashion company with this sale, and it will further focus on growing its five marquee industry leading brands—Tommy Hilfiger, Arrow, Flying Machine, and Calvin Klein—profitably.” the statement continued.
The casual clothing store Gap and Arvind had their franchise arrangement canceled in 2020. Gap was added to Reliance Retail Ltd’s portfolio last year after a long-term franchising arrangement was signed.
Over the past ten years, Sephora has struggled to grow its business since entering the country for the first time in 2012.
Alia Gogi, Asia President, Sephora stated, “We are tremendously excited to partner with the largest retail group in India to step-change our business. Rising affluence, increasing urbanisation and the proliferation of social media have driven greater awareness of self-care and beauty, unlocking major opportunities for prestige beauty.”
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She also added, “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,” said Alia Gogi, Asia President, Sephora.
The decision was made as the Indian beauty sector is expanding rapidly, providing businesses with a chance to meet the rising demand from consumers for beauty items.
Despite low per capita spending on beauty, India’s industry for personal care and beauty products is estimated to be worth $17 billion.
Under the Tira brand, Reliance Retail is, in fact, already active in the beauty retail sector.
The retailer will benefit from the relationship by being able to operate throughout the beauty and personal care value chain.
Rising aesthetic sophistication, an increasing proportion of women in India’s youthful workforce, and a new generation of consumers driven by a strong desire to express their uniqueness are driving the country’s developing beauty business. The alliance is well-positioned since the Indian consumerist movement is reaching a turning point, according to V Subramaniam, Director of Reliance Retail Ventures Limited.
