Aditya Birla Fashion & Retail is in an advanced stage of talks with American Eagle Outfitters to open standalone outlets of the US fashion brand popular with the youth, two people in the know of the matter said. The retail arm of the Aditya Birla Group is looking for the rights to sell the brand both offline and online in India, one of the people said. NYSE-listed American Eagle operates around 1,000 stores in the US, Canada, Mexico, the UK, China, Japan and several countries in the Middle East. A spokesperson for Aditya Birla Fashion said the company does not comment on “market speculations,” while American Eagle did not respond to an email sent recently seeking comment.
Interestingly, in 2015, the US firm had dragged Aditya Birla Fashion’s department storechain, Pantaloons, to the Delhi High Court alleging trademark infringement by the Indian company. The petition had accused Pantaloons of using a brand name — Urban Eagle — and logo that were deceptively similar to those of American Eagle. Talks with American Eagle are part of Aditya Birla Fashion’s aggressive push to form partnerships with foreign brands as it seeks to compete in India’s changing landscapes in fashion and lifestyle.
According to various industry sources, the fashion business of the Aditya Birla Group is under pressure from investors to stitch together a winning formula, reflecting the latest trends in India’s fashion scene that has been redefined in recent years by brands such as Zara and Swedish fashion retailer H&M. The Aditya Birla Group created Aditya Birla Fashion & Retail in May 2015 by merging its units Madura Fashion, Pantaloons Fashion & Retail and Madura Garments Lifestyle Retail. The retail arm owns brands including Louis Philippe, Van Heusen, Allen Solly and Pantaloons department stores.
Market watchers said the pressure on Aditya Birla Fashion has grown since peer Arvind Brands, which sells global labels including Tommy Hilfiger, Calvin Klein, Gap, US Polo, Gant and Aeropostale in India, raised Rs. 740 cr by selling a 10 per cent stake last year to Multiples Private Equity.