ABFRL and Sabyasachi: Why It Matters

ABFRL and Sabyasachi: Why It Matters

Comparisons with retail conglomerates in India or abroad may not square up. Notably though, this deal flexes the muscle of the Indian fashion business 

Last week, among the most consumed, heard and retold news in the Indian business of fashion was Aditya Birla Fashion and Retail Limited (ABFRL) acquiring 51 per cent stake in brand Sabyasachi. ABFRL, a part of the Aditya Birla Group, which has 3,025 stores is India’s first pure play fashion house. It posted a revenue of ₹8,743 crore at the end of 2019-2020 financial year with plans to add 400 stores in FY20.

With this announcement, it declared an investment of ₹398 crores into Sabyasachi couture, jewellery and other products of the brand, according to the press release.

There were many reasons why this became the most talked about fashion news of last week. Ever since Sabyasachi’s 20th anniversary celebrations in 2019, the designer had been quoted saying that he was in the market for investment. Speculation had been rife now and then (that went dormant in the COVID year) about which retail conglomerate would eventually invest in Sabyasachi, given the size of the investment involved. Two years back, there was speculation if Sabyasachi would accept investment from a prominent beauty brand for a line of cosmetics. There was also talk that his jewellery business was attracting investors. Mostly unverified industry gossip, you could say.

As Speculation Rests

All speculation was laid to rest with the ABFRL press release. The fact that “Sabyasachi”, among the most successful and news making couture brands from India had indeed been valued and invested in made it a top headline all right. Essentially this is optimistic news. It is about investment (which promises growth in an economy that has seen many concerns about fashion spending), consolidation of its growth pattern for a group like ABFRL (it also acquired 51 per cent stake in Shantanu & Nikhil and bought over crafts-based e-commerce label Jaypore for ₹110 crore both in 2019).



Additionally it is about choice. For both sides who have signed the dotted line. For ABFRL, Sabyasachi is a strategic name to acquire and drive news worthiness and value both real and perceived as it happens in strategic investments. While it clearly promises a profitable partnership, Sabyasachi himself, the designer and his coveted design and branding architecture might add on democratic reach and pricing rationalisation. For the same reasons it may lose some of the allure of rarity and distinction that makes a luxury brand what it is.

The aspiring Sabyasachi consumer will clearly benefit from it becoming available as an “ethnicwear” brand in a chain of stores. But for the one seeking the never seen before and unique floral lehnga with dexterously patterned embroidery for instance or that unbelievably seductive shade of aqua that only Sabyasachi can envision or those who want to ape the exclusivity and influence of Hindi cinema actors Deepika Padukone or Anushkha Sharma, there may be befuddlement between democracy and luxury.

Divided Opinions

That is why among fashion designers, opinion about this alliance was divided. Consider a few arguments from those that buzzed around. “If Sabyasachi couldn’t run his highly valued and aspirational brand on his own financial steam, what about the dozens of emerging and established designers.” Another: “By allowing 51 per cent stake, Sabyasachi has handed over creative control, how could he do that!” Another: “I don’t think it is enviable. I would like to build my brand, skyrocket its worth and only invite investment if I was ready for retirement,” said one of the most known younger Indian designers on the condition of anonymity. Last but not least: “Wow, there is hope for us too if Indian companies want to become LVMH and Kerring.”

Well, well.


Photo: instagram/snbyshantanunikhil

‘Declaration 2034’ Spring-Summer 2021 collection by Shantanu & Nikhil.

Sure, a majority see it as good news. Shantanu Mehra one half of the duo Shantanu & Nikhil spoke about his experience after the ABFRL’s investment in their company Finesse International Design Private Limited in 2019. “Unlike venture capitalist investments, strategic investments like these have both sides chasing the same vision together,” says Mehra. He adds that the democracy, pricing logic, process, branding, sourcing, warehousing, structure and bigger reach the ABFRL collaboration had afforded S&N’s “bridge to luxury wear and patriotic chic meets the millennial consumer” ideas in fashion a natural brand extension. “With our new brand S&N, the entire supply chain goes through the ABFRL machinery, there have been a lot of learnings regarding SAP-driven (Systems Applications and Products in Data Processing) e-commerce too. We have been able to add three new stores even during the COVID year,” he says.


Photo: Jaypore.com

From Jaypore’s ‘Teesta’ collection.

Others may not be as gung ho about collaborations and takeover. Shilpa Sharma, co-founder of Jaypore that ABFRL acquired in 2019 feels that she does not see any big shift in approach, technology or conversion of the customer who visits the e-commerce space into purchase after ABFRL took over. “There is no real change in customer-facing issues, nor has there been a revitalisation of Jaypore’s storytelling or overall buyer experience,” she says. A few vendors listed with Jaypore that this writer called declined to comment on record.

Comparisons, Not Quite

Both sides who have signed this deal that is Ashish Dixit, managing director of ABFRL, and Sabyasachi Mukherjee remained unavailable for further comment beyond the press release. They cited a “silent period” of fine-tuning the acquisition. Therefore, quick comparisons drawn in the market both with India based conglomerates or international ones may not hold right now at least, as the right templates to compare. Within India for instance, conglomerates like RBL, which has close to 50 brands in luxury, bridge-to luxury, high premium, high street labels from across the world only has Satya Paul as an Indian wear brand which it acquired as part of the Genesis Colors Ltd merger in 2018. In an interview to this publication in September 2019, when asked about cultivating luxury brands from India, Darshan Mehta, CEO and President of RBL said he believed that “Crafts ability doesn’t give any country or company the ability to create businesses of scale. That is the biggest challenge with Indian luxury.” Mehta had added that he felt that Indian brands seldom take a leap of faith and give their companies to run in other countries (unlike international brands).



Internationally too, good fits (as they say tailoring can be perfect but business collaborations will at best be good) in acquisitions define layers of choices, both commercial and those related to image, value, “heritage and long-term vision”. The latter is a phrase from LVMH chief Bernard Arnault on the website. The French multinational corporation and conglomerate has acquisitions in 75 brands across fashion and leather goods, wines and spirits, perfumes and cosmetics, watches and jewellery and selective retailing. It added its 76th maison when it finally completed its acquisition of the iconic American jewellery brand Tiffany (for $15.8 billion, the most expensive deal for LVMH) last month. This was after a contentious battle. In fact, the messy details of that battle published at length by the global fashion and luxury media may serve as significant red flags for partnerships like that between the storied Sabyasachi and ABFRL to refer to.

It may be crucial for ABFRL and Mukherjee to create a joint social identity that matches the business vision of both companies and retains the creative signature of Sabyasachi, the design mind.

When it is ready for questions from the Indian media, ABFRL might also want to explain better what it means by “growing its ethnic wear market” on the one hand and at the same time, “complementing Sabyasachi to become a luxury fashion house from India”. Vocabulary matters because it is a matter of category definition. Sabyasachi is perhaps “ethnic wear” if loosely defined (though the brand’s jewellery cannot be squeezed in that definition) but promoting it as Indian wear could actually strengthen its international appeal as a “luxury brand”. Not all designer and couture clothing from India is ethnic after all. It may also be time to bring stringent legal action against the tribe of Sabyasachi plagiarists—a variety of such traders work profitably in Indian high street and local bazaars diluting the appeal of the original product. Now, it is an urgent issue if ABFRL wants to sell Sabyasachi from a chain of stores.


Few of the apparel brands under the ABFRL umbrella.

That said, among the notable and optimistic strategies that the Indian fashion and retail market has thrown in the last year are three models for observation. One, of this nature, big and bold—like the collaboration between Sabyasachi and ABFRL. Two, emerging designer brands that for survival and innovative growth are bringing in other product categories and peer designers to sell from their e-commerce platforms. The Bengaluru-based House of Three studio for instance. Thirdly, small but resilient indie brands like the textiles-focused Rouka by Sreejith Jeevan from Kochi, which follows linear clarity about its product with its origin and cultural identity in Kerala and applies all its might to keep it tightly defined, well priced and simply curated. Indian fashion needs urgent survival strategies after all.

2021 is certainly off to a good start.

Banner: Sabyasachi collection launched to mark the couturier’s 20 years in the industry.