Reliance Brands Limited and its growth in the Luxury Market

This case study explores the market penetration of Reliance Brands Limited in the premium fashion market. It discusses the financial factors, product line, acquisitions and mergers that have contributed to its growth. The study concludes that the growth of Reliance in the luxury market in India stands on its pillars of financial strength, a robust portfolio of international and domestic brands and acquisition and merger strategies.

Running head: RBL AND IT'S GROWTH IN THE LUXURY MARKET
Reliance Brands Limited and its growth in the Luxury Market
Name of the Student
Name of the University
Author note

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RBL AND IT'S GROWTH IN THE LUXURY MARKET
Table of Contents
Financial factors:.............................................................................................................................2
Product line:.....................................................................................................................................3
Acquisitions and merger:.................................................................................................................4
Analysis:..........................................................................................................................................4
References:......................................................................................................................................5

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RBL AND IT'S GROWTH IN THE LUXURY MARKET
Introduction of the case:
Reliance Brands Limited is the premium fashion arm of Indian business conglomerate
Reliance Industries Limited having its headquarters in Mumbai, India. The company markets
international and domestic brands in the apparel, footwear and lifestyle accessories. The paper
would explore this market penetration of Reliance Brands Limited in the premium fashion
market.
Body of the case:
Reliance Brands Limited is the luxury arm of the Indian business conglomerate RIL
having its base in Mumbai, India. The company establish in 2007 is making a strong foray into
the premium fashion market in India. The strong establishment of the company in the fashion
market can be attributed to following factors (ril.com 2018).
Financial factors:
The financial strength of RIL is the first factors which attributes it with a leading in the
premium retail sector in India. RIL is listed on NSE and BSE which are the leading stock
exchanges in the country. This allows the company to exploit the stock market base of the
country. RIL’s global depository receipts are listed on Luxembourg Stock Exchange which
allows it to raise capital from the international securities markets as well. This provides the
company and its subsidiary RBL an immense capital base (Miroshnychenko, Barontini and Testa
2017). Reliance Brands Limited also enjoys control and/or enter transactions within the other
fellow subsidiaries like Reliance Retail Limited. Reliance besides being a subsidiary to Reliance
Industries Limited, also has its own subsidiaries like Reliance Lifestyle Holdings Limited. These
subsidiaries too contribute to the capital structure of the Reliance Brands Limited.

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RBL AND IT'S GROWTH IN THE LUXURY MARKET
Reliance Brands Limited draw its financial strength from the revenue base of its parent
company RIL. A review of the financial statements of the Reliance Brands Limited clearly
shows that the company is financially strong. The profit and loss account for the year ended 2018
clearly that the company has achieved an increase in the value of sales to INR 33194.41 lakhs
compared to INR 26504.57 lakh (ril.com 2018). However, the expenses have also shown which
has eaten into the revenue earned from sales of premium luxury goods. However, the amount of
loss is less than the previous year. The balance sheet shows that the company has more assets
compared to the previous year and the current ratio is well above 2:1, both which are signs of
growing financial strength of the company in the premium fashion market.

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RBL AND IT'S GROWTH IN THE LUXURY MARKET
Figure 1. An extract of the balance sheet of Reliance Brands Limitd for the period 2017-2018
(Source: ril.com 2018)
Product line:
The success of Reliance Brands Limited in the luxury goods market can be attributed to its
partnerships and joint ventures with leading international luxury brands. Reliance Brands
Limited has partnerships with over fifty international brands like Giorgio Armani and Kate
Spade which are among the top brands in premium footwear, apparel and lifestyle items. These

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RBL AND IT'S GROWTH IN THE LUXURY MARKET
partnerships attributed Reliance Brands Limited with an international product line consisting of
top international brands which enables the company to dominate the Indian fashion market
(Chadha 2018). The partnerships provide the company with exclusive rights to market these
international brands in India thus, earning immense revue to support its robust business
operations in the premium fashion market, thus strengthening its position.
Acquisitions and merger:
The acquisition and merger is a strategy which Reliance Brands Limited is applying to
gain more dominance in the luxury fashion market of India (Braguinsky et al. 2015). The
company acquires Indian luxury firms besides partnering with international brands. This allows
Reliance Brands Limited to dominate the luxury goods both in terms of Indian and international
luxury labels (ril.com 2018).
Analysis:
An analysis of financial, product line and acquisition and merger strategies of Reliance
Brands Limited shows that these strategies play a key role in growth of the firm in the luxury
market in India. The financial strategy enables Reliance Brands Limited acquire immense
capital which it invests in the international luxury market (Chan, Ngai and Moon 2017). This
allows the company to partner and enter joint venture with international luxury labels like Paul &
Shark. The conglomerate in addition to international brands also own leading Indian textile
brands like Vimal. This attributes the company with a formidable portfolio required to dominate
the luxury fashion market (ril.com 2018). The strategy of acquisition and merger enables the
company to acquire its competing firms, thus further cementing its growth in the market.
The closure of the case:

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RBL AND IT'S GROWTH IN THE LUXURY MARKET
It can be concluded from the study that the growth of Reliance in the luxury market in
India stands on its pillars of financial strength, a robust portfolio of international and domestic
brands and acquisition and merger strategies. The discussion can be closed by mention that the
conglomerate should continue to implement these strategies more aggressively to grow more in
the luxury market.

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RBL AND IT'S GROWTH IN THE LUXURY MARKET
References:
Braguinsky, S., Ohyama, A., Okazaki, T. and Syverson, C., 2015. Acquisitions, productivity, and
profitability: evidence from the Japanese cotton spinning industry. American Economic
Review, 105(7), pp.2086-2119.
Chadha, A.A., 2018. Analysis of premium handbag preferences in India with special focus on
Kate Spade. NIFT.
Chan, A.T., Ngai, E.W. and Moon, K.K., 2017. The effects of strategic and manufacturing
flexibilities and supply chain agility on firm performance in the fashion industry. European
Journal of Operational Research, 259(2), pp.486-499.
economictimes.indiatimes.com 2018. Reliance Brands in talks to buy Genesis Luxury. [online]
The Economic Times. Available at:
https://economictimes.indiatimes.com/industry/services/retail/reliance-brands-in-talks-to-buy-
genesis-luxury/articleshow/64627458.cms [Accessed 5 Sep. 2018].
Miroshnychenko, I., Barontini, R. and Testa, F., 2017. Green practices and financial
performance: a global outlook. Journal of Cleaner Production, 147, pp.340-351.
Ril.com. 2018. Textile Industries In India | RIL Textile Manufacturing | Polyester, Cotton &
Wool Fabric | Automotive Furnishing | Vimal Apparel | Naroda Plant. [online] Available at:
http://www.ril.com/OurBusinesses/Textiles.aspx [Accessed 5 Sep. 2018].