In a significant development in the Indian fashion industry, House of Anita Dongre (HOADPL) is set to acquire a nearly 40% stake held by US private equity firm General Atlantic (GA). This strategic move comes after a nine-year partnership, during which GA invested approximately ₹150 crore in the company.
The decision to buy back the stake is attributed to several factors, including a challenging market environment and a decline in revenue and earnings. A recent ICRA report highlighted the company’s revenue projection of ₹500-₹550 crore for FY24 and FY25, a significant drop from ₹606 crore in FY23. The report also cited a decline in operating profit margins to 19-20%.
Industry experts have attributed the challenges faced by HOADPL to a strategic shift in its brands, such as AND and Global Desi, from premium to mass market segments. This shift, coupled with heavy discounting on online channels, has impacted the brand’s perceived value and profitability.
Founded in 1995, House of Anita Dongre has been a pioneer in the Indian fashion industry. The company’s portfolio includes popular brands like AND, Global Desi, and the luxury designer wear label Anita Dongre. While these brands have been key contributors to the company’s revenue, the recent market dynamics have necessitated a strategic reassessment.
To address these challenges, HOADPL has undertaken several measures, including the closure of underperforming retail locations and the discontinuation of certain brands. The company has also implemented a new strategy to improve its financial performance.
As HOADPL embarks on this new chapter, it will be crucial to balance its growth ambitions with a focus on profitability and brand integrity. The company’s ability to adapt to evolving consumer preferences and market trends will be key to its long-term success.
