Wednesday, 25 October 2017

Flipkart planning to buy stake in Future Group's fashion arm

By Aashi Sehrawat

India's largest online retailer, Flipkart, is looking to buy 8-10 per cent stake in Future Lifestyle Fashions Ltd. (FLF), one of the country's leading offline fashion and lifestyle retailers with total retail space of 5.4 million sq. ft. across 400 stores in 90 cities. Future Lifestyle owns and markets 41 domestic and global fashion brands including Lee Cooper, Scullers, Indigo Nation, John Miller and Jealous 21.

Leaders from both sides, majorly Kishore Biyani from FLF - the listed fashion arm of the Future Group, have met in Mumbai, though nothing has been finalised yet; follow-up meetings will be held soon as the Diwali is now over.

Last month, Amazon, Flipkart's biggest rival, bought a 5 per cent equity in retail major, Shoppers Stop for Rs. 179.25 crore, being its first investment in offline retailer. Flipkart followed the same path to expand its base into smaller towns.

If the deal proves to be successful, it could be a big boost for Flipkart-owned fashion subsidiary Myntra, which is itself aiming to become profitable at an EBITDA level by March next year. Also, they could use the Central and Brand Factory footprint to create exclusive experience centres and other shop-in-shop formats.

On the other hand, Kishore Biyani can seek preferred access for Future's fashion brands through the Flipkart network. Previously, Biyani had teamed up with Amazon in October 2014 to sell Future Group's portfolio of brands on Amazon's platform in India, but that partnership did not make much profits.

Apart from this alliance, Flipkart has two more steps planned to beat its rival, Amazon and reach to greater heights in the marketplace. These are:
  • Flipkart had initially launched the loyalty programme called Flipkart First which fizzled out due to lack of focus from the company and low interest from consumers. So it is now planning to relaunch this programme to compete with Amazon Prime.
  • Flipkart is also in talks with internet start-ups like BookMyShow and MakeMyTrip for free and faster deliveries and discounts as well.

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