Reliance acquires Sephora retail division from Arvind Fashions for Rs 99 crore
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Bengaluru: In a strategic move to bolster its presence in India's burgeoning beauty and cosmetics market, Reliance, led by billionaire Mukesh Ambani, has acquired the Sephora retail division from Arvind Fashions for Rs 99 crore.
The deal provides Reliance exclusive rights to operate and expand Sephora's footprint in the country, encompassing its 26 stores.
Reliance, India's largest retailer, previously launched its beauty retail platform, Tira, in April, positioning itself to compete with industry players like Nykaa and the Tata Group. The acquisition of Sephora's retail division aligns with Reliance's commitment to tapping into the thriving demand for beauty products in the country.
Arvind Fashions, in collaboration with the French brand for the past eight years, finalised the Rs 99 crore deal with Reliance Retail Ventures Ltd (RRVL). Reliance Retail expressed its commitment to building and enhancing Sephora's presence across various channels in India.
"Sephora's products range from make-up to skincare, and the chain also retails luxury brands such as Dior and Tom Ford, both offline and online. Additionally, it recently became the exclusive retailer for pop star Selena Gomez's Rare Beauty brand in India," stated Reliance Retail in an official statement.
The agreement between Reliance and Arvind Fashions, valued at Rs 990.2 million ($11.89 million), materialised after months of reported talks between Sephora and Reliance Retail for a retail partnership. The deal is expected to facilitate Reliance's entry into the clean beauty and celebrity-owned brand segments, capitalising on the growing demand in the Indian beauty market.
The move comes against the backdrop of increased competition among beauty retailers in India, each striving to attract customers in the wake of rising affluence, urbanisation, and heightened awareness of self-care and beauty through social media.
Other major players in the Indian beauty retail landscape, including Nykaa, Tira, and Shoppers Stop, have also expanded their product offerings to meet consumer demands.
Following the announcement, shares of Arvind Fashions experienced an 11.5% surge, ultimately closing 5.8% higher. The beauty division hosting Sephora reported revenue of Rs 3.37 billion in fiscal 2023, contributing approximately 7.6% to Arvind Fashions' total revenue.
Arvind Fashions intends to utilise the proceeds from the deal to invest in its existing brands and to retire existing debt, paving the way for further strategic developments in the evolving retail landscape.