Arvind Fashions, Gap Part Ways After Six Years

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Arvind Said In The Filing That Currently It, Along With The US Fashion Company, Is Looking For A Buyer For Gap Franchisee In India.

Gap Inc. and Arvind Fashions are parting ways, six years after the Bengaluru-based company signed a master franchisee for India and Arvind Fashions and the US fashion group are currently looking for a buyer for Gap’s India business.

“We wish to inform that Arvind Lifestyle Brands Limited, a wholly owned subsidiary of Arvind Fashions Limited (AFL) and Gap Inc., have decided to mutually terminate their franchise business relationship in India,” Arvind Fashions told the Bombay Stock Exchange in a filing. Arvind said in the filing that currently it, along with the US fashion company, is looking for a buyer for Gap franchisee in India.

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“As next steps, both companies will work out modalities regarding transition of the Gap business,” the filing further said. “Arvind Lifestyle Brands Limited, has appointed an investment bank to find a buyer for the Gap business.” One person familiar with the development said the companies have approached one of India’s largest retail groups and an e-commerce company for a possible deal. Arvind said Gap contributed about 4.7% of Arvind Fashions’ consolidated turnover or Rs 182 crore in the fiscal year ending March 2020 with a loss of Rs 34 crore before taxes.

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Over the years, Arvind has been trying to make Gap business profitable by pruning the store sizes and by increasing local sourcing for the brand in India but the Covid-19 pandemic hit it hard with stores shut for months and with dwindling footfalls even after that as consumers shied away from malls and high streets.

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Arvind Fashions blamed poor business amid the pandemic that is leading to the snapping of ties.”Due to circumstances post the corona pandemic, both companies agreed that a mutual termination was in both companies best interest,” the filing said.

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