UK fashion brand Superdry has announced a £40 million deal to sell its licence and brand assets in South Asia to Indian commerce giant Reliance.

The deal, announced on Wednesday, will create a joint venture with Superdy investing £9.6 million for 24 per cent ownership. This JV covers Sri Lanka, Bangladesh and India. Superdry previously partnered with Reliance for the brand’s launch in India in 2012, and said it expects to receive gross cash proceeds of £30.4 million as a result of the deal.

Reliance, via its retail subsidiary, operates more than 18,000 stores and has partnerships with western brands including M&S and Pret A Manger. The company is reportedly in talks with the sovereign wealth funds of Singapore, Abu Dhabi and Saudi Arabia for investments of around $1.5 billion.

Superdry, which warned of stunted revenue growth after posting bigger-than-expected annual losses last month, said of the joint venture: “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 attractive potential.”

The company said that the deal would help it "focus on growing its brand and increasing sales in its more established territories, where it has strongest expertise."

Superdry said that the assets generated about 1.8 per cent of total group sales in the financial year through April 30.

In March, Superdry announced a similar deal with South Korea's Cowell Fashion Company worth £40 million for its intellectual property in the Asia Pacific region.

Share Story: