Arvind Fashions in talks with Reliance Retail to sell two denim brands

NEW DELHI: Arvind Fashions Ltd is in talks with Reliance Retail to sell two denim brands -- Newport and Ruf & Tuff, three people familiar with the development said.
It is also, separately, in talks with value retailer V-Mart to sell its Unlimited department store chain.

Arvind Fashions has been restructuring its businesses for about a year, by trimming its global brands portfolio and pruning unviable outlets. Last year, it exited marketing arrangements with loss-making global labels including Izod, Gant, Nautica and Ed Hardy to focus on US Polo, Gap, Aeropostale, Flying Machine, and other labels.

The Bengaluru-based retailer also shuttered a substantial number of its Unlimited stores and virtually exited markets in north India.

“We do not comment on market speculations,” said an Arvind spokesperson when asked about plans to sell the Newport, Ruff & Tuff and Unlimited brands.

Lalit Agarwal, MD of V-Mart, declined to comment.

A Reliance Retail spokesperson said in an email, “As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis.”

V-Mart was to ink a deal to fully acquire the Unlimited store chain in March, but the nationwide lockdown in end-March has delayed it, one of the sources said.

Arvind Fashions was hoping to bring its business on track this year when Covid-19 pandemic hit sales at its offline stores, just like many of the fashion retailers globally.

In May, the retailer of brands such as Gap, US Polo, Sephora, Aeropostale and Flying Machine, deferred payments to staff owing to reduced sales and depleting cash flow amid the lockdown.

Earlier this week, Walmart-owned Flipkart picked up a substantial minority stake in Arvind Fashions’ subsidiary Arvind Youth Brands for Rs 260 crore as part of the home-grown e-commerce company’s plans to strengthen its mid-market fashion portfolio.

Arvind Fashions reported a consolidated net loss of Rs 208 crore for the quarter ended March 31, compared to a net profit of Rs 21.30 crore a year earlier. During the quarter, its gross debt ballooned to Rs 1,210 crore, a 53% jump over financial year 2018-19.