Picking up a strategic stake in brands with substantial offline presence are gradually becoming emerging trend for large and mid-size e-commerce companies. After Amazon investment in brick & mortar retailer Shoppers Stop, largest fashion e-tailer Myntra and Flipkart are said to be in advance stage to pick a 5 per cent stake in Wildcraft.
The deal will give Myntra and Flipkart some exclusive control over adventure equipment and outdoor gear firm’s inventory. Importantly, they will have access to Wildcraft 175 retail stores across 65 cities that can be used for its branding (similar to Amazon-Shoppers Stop deal).
Besides buying a minority stake, Amazon had signed a pact with Shoppers Stop to get space to set up its experience centres at Shoppers Stop outlets.
If the investment deal gets through, Wildcraft will be next brand selected for Myntra’s Brand Accelerator programme. The programme empowers emerging brands in fashion and lifestyle category.
Last year, Myntra has on-boarded two women-centric brands – AKS and Chemistry for the accelerator programme. It’s eyeing to accelerate 10-15 local fashion brands this year.
Wildcraft sells lifestyle products like footwear, clothing, camping and hiking equipments, among others.
Five months ago, PremjiInvest was in an advanced stage to invest Rs 100 crore in Wildcraft for 15 per cent stake. However, it’s not public whether the deal materialised or not. Previously in 2013, Silicon Valley-based Sequoia Capital invested $11 million to acquire a 20 per cent stake in the company.
The Bengaluru-based company has three manufacturing plants in India – two in Karnataka and one in Himachal Pradesh. It had posted a revenue of Rs 400 crore in FY17 and projects to clock Rs 500 crore in FY18.
Meanwhile, Flipkart had reported a loss of 68 per cent in FY17 at Rs 8,771.4 crore. The revenue of the company, however, grew by 29 per cent and stood at Rs 19,854.6 crore in the last fiscal.
Myntra had reported an 87 per cent jump in its turnover in FY17 as compared to previous one. It had a total turnover of Rs 2,000 crore in the aforementioned period.
The development was first reported by ET.