The Aditya Birla Fashion and Retail (ABFRL) shares rallied more than 9 percent during Tuesday’s session. The surge in the share price comes on a day the firm announced it has signed a long-term licensing agreement, which grants it exclusive rights to distribute and sell Reebok products through wholesale, e-commerce and Reebok branded retail stores in India and other ASEAN countries.
The Aditya Birla Fashion stock ended 7.44 percent higher at Rs 285.85 per share on the Bombay Stock Exchange (BSE) whereas it surged 7.21 percent to close at Rs 285.35 apiece on the National Stock Exchange.
The deal will Reebok marks a foray for ABFRL into India’s fast-growing sports and activewear segment. "This segment is expected to grow to $13 bn by FY24 at an annual growth rate of 14%. The transaction marks a significant milestone in the journey of ABFRL, which has evolved its portfolio into a powerhouse of brands across all major fashion and lifestyle segments over the last several years," the lifestyle and formal wear firm said in an exchange filing.
The fashion retailers’ deal will be effective once the complete transfer of global ownership of the 'Reebok' brand from Adidas to Authentic Brand Group, US. The transfer is expected to close in Q1 of 2022, according to the filing.
Ashish Dikshit, managing director, ABFRL said, "As Indians get more active, athletic and health focussed, their consumption of apparel and accessories is expected to increasingly change in line with these trends, providing an opportunity to build iconic brands of global repute. Reebok is one of the leading brands in the sporting goods industry globally and has built a very strong presence in the Indian market over the last two decades."
In partnership with Authentic Brand Group, ABFRL plans to accelerate Reebok’s business in India, combining its global appeal and salience amongst Indian youth, he added.
(Edited by : Jomy Jos Pullokaran)
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