In a move that will give its wardrobe a whole new look, Aditya Birla Fashion and Retail (ABFRL) on Monday said it was buying ethnic brand Jaypore. Given the growing popularity of branded ethnic wear, Jaypore which primarily sells online has the potential to become a big business, especially since ABFRL s game plan is to go offline.
ABFRL, which has devoted little shelf space so far to ethnic wear, is buying the brand at an enterprise value of `110 crore in an all-cash transaction. The deal might seem a shade expensive; revenues in 2018-19 (unaudited) were `38.9 crore, smaller than the `41.9 crore reported in 2017-18 and the `40.6 crore posted in 2016-17. However, industry watchers point out that Jaypore s brand recall is high.
Indian wear currently accounts for about nearly three-fourths of the $19 billion women s apparel market in India, according to Edelweiss Research. However, branded ethnic wear has only a small share of about 10% of the $13.5-billion women s Indian wear market, with salwar kameez, kurtis and mix accounting for $6.5 billion and sarees and blouses around $7.2 billion.
Of this $6.5 billion, branded apparel accounts for 21% or $1.4 billion and the larger contribution of 79% or $5.1 billion comes from unbranded segment.
Although the market is changing with the launch of brands such as BIBA and Fab India, tailored clothing accounts for the biggest chunk. Harminder Sahni, founder and MD, Wazir Advisors, told FE that the branded ethnic market was now attracting the attention of the larger players. Manyavar or BIBA were more designer-like individual entrepreneurs and not like an Arvind, Raymond or Aditya Birla Fashion. This acquisition shows the potential of ethnic wear is being acknowledged by the large companies and we should see much more activity in this space, Sahni said.
Given how getting Indian wear tailored is simple and cheap, it s not surprising the organised sector has mostly been focused on western fashion, starting with men s clothing. Women s clothing especially ethnic wear has received less attention because the market is relatively small. The shift from unorganised/unbranded to the organised/branded is expected to drive a around 30% compounded annual growth rate (CAGR) over FY17-20 in the branded ethnic apparel segment, according to analysts.
Jaypore is an Indian online and offline retailer, that offers curated collections of handmade, handwoven and handcrafted apparel, jewellery, home textiles and accents, based on craft forms, from all over India. The company s business comprises online and offline operations and has a customer base in 60 countries across the world.