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Nykaa and Middle East brand Apparel Group announced a strategic alliance to create an omnichannel beauty retail platform in the GCC market.
On Thursday, both brands announced the partnership. According to its disclosure to the exchanges, both the companies have undertaken an omni-channel, multi-branded beauty retail operation business in the countries that are part of the Gulf Cooperation Council (GCC).
Nykaa will leverage the Apparel Group’s robust retail infrastructure network and deep market relationships to build distinctive Gulf Cooperation Council (GCC) focused beauty offerings in the UAE, Kingdom of Saudi Arabia (KSA), Qatar, Oman, Kuwait, and Bahrain.
Through an entity to be incorporated in the Abu Dhabi Global Market, in which FSN International will hold a 55 per cent stake, and the remaining 45 per cent will be held by Apparel Group. The deal is estimated to be closed by March 31, 2023.
Focus on beauty brands
Falguni Nayar, CEO of Nykaa, said that Nykaa will bring its multi-brand retail expertise, beauty playbook, e-commerce expertise, and technology. “The new omnichannel entity will focus on beauty brands for now and will have a new brand name,” she said. However, she didn’t reveal investment size or revenue sharing plans at the moment, but added that “investment has been kept at the minimum at first, and will be increased as and when required. It is the market and revenue growth opportunity that is extremely exciting.”
The strategic alliance with Apparel Group will help Nykaa leverage the Apparel Group’s robust offline retail network and deep market relationships to build distinctive GCC-focussed beauty offerings in the Kingdom of Bahrain, State of Kuwait, Sultanate of Oman, State of Qatar, Kingdom of Saudi Arabia and the United Arab Emirates (UAE). Technology-led Nykaa is now set to bring its keen understanding of the beauty category and strong partnerships with domestic and international brands to the GCC’s beauty-forward consumers.
With the agreement, Nayar said that the company hopes to grow in a region where it sees high demand for beauty products, months after inflationary pressures in India led it to report a “subdued season” in the three months ended June.
Nykaa, featured in the list of 2022 TIME100 most influential companies, has 112 retail stores (as of June 30, 2022), catering to nearly 28,000 pincodes and offering 4500+ brands across platforms. The technology-led company is now set to bring its keen understanding of the beauty category and strong partnerships with domestic and international brands to the GCC’s beauty-forward consumers.
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