Arvind Lifestyle Brands Limited and Gap Inc. have mutually decided to part ways in the Indian market after years of partnership.
This move comes as Indian fashion retail has been hit hard due to the COVID-19 pandemic. The US brand’s decision to break away from its franchise partner may result in its exit from India altogether, according to the Times of India.
For the purpose of the termination of the agreement, Arvind Lifestyle Brands has appointed an investment bank to find a buyer for Gap while both companies are currently working out the finer details.
A few niche boutiques have shown interest in the brand but failing to find a buyer will mean it will become virtually non-existent in the country.
In the previous fiscal, Gap had reported revenue of Rs. 182 crore with a loss before tax of Rs. 34 crore. On the other hand, Arvind Fashions reported a net loss of Rs. 399 crore in FY 19-20 as opposed to a profit of Rs. 21 crore the previous year.
Its revenue also declined by 17 per cent from Rs. 4,644 crore in FY 18-19 to Rs. 3,866 crore in FY 19-20.
With a network of around 1,300 stores in the country and a portfolio of brands like U.S. Polo, Arrow and Flying Machine amongst others, Arvind Fashions is planning to focus on some of the top earning labels to tide over the pandemic.
