In a move that would shot up its sales by Rs. 300 crores, Flipkart-owned lifestyle e-commerce venture Myntra is in advanced discussions to buy a majority stake in fitness and sportswear brand HRX, which was launched by actor Hrithik Roshan.
Rajesh Narkar, the vice-president of Myntra Fashion Brands says that HRX will increase its ales by Rs. 200 crores this financial year, up from Rs.100 crore last year.
He said, “This deal will add an attractive sportswear and lifestyle brand in our private brands collection. Indians are looking to become healthier, more active and want more choice. Leaving aside a few international sports brands, there’s a lack of choice for consumers in sportswear and lifestyle.”
“There’s massive scope to build a large brand in this segment. Buying an equity stake in HRX will align our vision with HRX’s over the long term,” added Narkar.
Reports say, Myntra’s first outlet will open either in New Delhi or Bangalore. The company had earlier also announced its plans to diversify into new segments such as home furnishings, jewellery, and personal care.
Myntra currently owns 12 private brands, and the largest private brand on its platform is Roadster, a casual wear offering.
Launched in 2013, HRX is a sports and lifestyle brand that is sold on Myntra and Flipkart. Apart from clothing and shoes, its products include belts, backpacks and wallets.
Myntra has been the most successful in online retailers in building a large private brands business ahead of its parent Flipkart and smaller rival Jabong. One of the main drivers of Myntra achieving profitability over the next two years is the increasing sales of private brands, which bring in higher margins than third-party brands.
Myntra expects private brands to contribute up to 30% of its sales by March 2017, from about 20% at the beginning of the financial year. The company is targeting gross sales (net of discounts but before product returns) of Rs.5, 000 crore this year.