UK fashion retailer Superdry on Wednesday said it will sell its intellectual property assets in South Asia to Reliance Retail for 40 million pounds (Rs 402 crore) through a joint venture.
Superdry, whose fashion line mostly includes sweatshirts, hoodies and jackets, will own 24 per cent of the joint venture while Reliance Retail, India's largest retailer, will have the remaining 76 per cent.
Under the agreement, Superdry's brand IP assets in South Asia will be permanently transferred to the new JV entity.
In a filing to the London Stock Exchange, Superdry plc said it has signed an IP joint venture agreement with Reliance Brands Holding UK Ltd for "the sale of its intellectual property assets, including the SUPERDRY brand and related trademarks in India, Sri Lanka, and Bangladesh to the joint venture vehicle".
The UK fashion retailer, which has been grappling with weak orders from wholesale partners cautious on stock levels and liquidity, said it expects gross cash proceeds of 30.4 million pounds.
RBUK is held by Reliance Retail Ventures Limited (RRVL) through its subsidiary Reliance Brands Limited - Superdry's exclusive franchise partner in India since 2012.
Reliance will continue to oversee brand operations in the three countries, Superdry said.
RBL is the premium retail arm of RRVL, which operates over 18,000 stores across India offering 50 different luxury fashion brands with a presence in 7,000 towns and a total shopping area of more than 65 million square feet.
Later, Reliance in a statement said RBL had inked a long-term franchise agreement with Superdry PLC in 2012 and introduced the brand in India.
"Coupled with Reliance Brand's appetite to invest in accelerating Indian consumption narrative, the deal paves way for Superdry's future expansion in the country and neighbouring territories."
The brand has expanded rapidly to 200 points of sale across 50 cities. E-commerce continues to drive incremental growth for the brand, boosting its reach beyond 2,300 Indian cities, underlining RBL-run Superdry India operations as the largest franchisee network of the brand globally.
Superdry's offerings include versatile outerwear, T-shirts, and shirts for men and women, which have become increasingly popular, alongside categories like shoes and accessories.
In 2019, Superdry expanded into sports and activewear under 'Superdry Sport', adding performance-driven products to its portfolio.
Darshan Mehta, MD of Reliance Brands Limited, remarked, "Superdry has come to define urban cool in India for more than a decade.
"The journey has been rewarding & fun in equal parts due to working with the hugely talented Superdry team and the sense of camaraderie led by Julian.
"I look forward with excitement to this new era of our partnership."
Superdry UK will maintain a stake in the brand for the Indian territory and will continue to support brand development through sharing expertise in design, product development, and marketing.
Julian Dunkerton, Superdry's CEO and Founder, said: "India represents an incredible opportunity for Superdry, and our excellent existing relationship with Reliance means we will be able to hit the ground running.
"Under our new partnership, I am confident that the brand will continue to accelerate and build on our success to date to become a major force in the Indian fashion market."
This announcement represents a natural progression in the brand's ongoing success and popularity in India, the statement said.
Since partnering with RBL in 2012, the Superdry brand has expanded rapidly in India.
"Considering the backdrop of a growing Indian economy, a growing population of affluent shoppers, and ever-increasing apparel consumption rates, the Superdry brand in the market has an attractive potential.
"As the leading fashion retail operator in India, RBUK is best placed, through a majority IP ownership stake, to maximise the opportunity," Superdry said.
Superdry said it believes that the partnership with Reliance will provide the best opportunities for the future growth of the brand in South Asia, allowing the company to focus on growing its brand and increasing sales in its more established territories, where it has the strongest expertise.
For the financial year to April 30, 2023, the South Asian IP generated approximately 1.8 per cent of total group sales and contributed revenue of 11 million pounds and profit before tax of about 2.6 million pounds, including centralised costs allocation.
