Aditya Birla Fashion and Retail Ltd. (ABFRL) has closed a deal of worth US $26 million with Forever 21 from Diana Retail Pvt. Ltd. As per the deal, ABFRL has acquired the Indian business of the US based firm and it has also been appointed as the exclusive franchisee for the Forever 21 brand in the country. The announcement came after ABFRL’s regulatory filing with the Bombay Stock Exchange Today.
The filing further states that ABFRL will operate Forever 21 retail outlets and undertake online retailing for the brand in the country. The company had executed a Business Transfer Agreement with Diana Retail and DLF Brands (the promoter of Diana Retail) for the acquisition of the business undertaking of Diana Retail relating to the business of operating retail stores in India for the sale of clothing, artificial jewellery, accessories and related merchandise under the Forever 21 brand and also through the e-commerce channels (Forever 21 Undertaking) on a going concern basis by means of 'slump sale', for a lump sum considerations and certain other matters incidental thereto.
The current Indian business model of Forever 21 suggests that the company has a joint venture with DLF Brands and it conducts its operations from 12 brick-and–mortar stores in India. For its online business, it sells its product through an online shopping portal Myntra.
However, Forever 21’s spokesperson has put his final seal on the deal and informed that ABFRL has acquired the existing business of Forever 21 from Diana Retail, a wholly subsidiary of DLF Brands through a slump sale of the business undertaking. ABFRL has also entered into a franchisee agreement with Forever 21 for the online and offline channels for the Indian territory.
