Apparel retailer Arvind Lifestyle Brands Limited (ALBL), on Thursday announced that it has signed a definitive agreement to sell its value-fashion retail chain Unlimited to retailer V-Mart Retail Ltd., for an estimated Rs150 crore in an all-cash transaction.

The move comes as Arvind Fashions Limited (AFL) continues to lower debt and focus on six key lifestyle and beauty brands. ALBL is a wholly owned subsidiary of AFL. It will also utilize funds from the sale towards working capital purposes.

Unlimited operates 74 value fashion retail stores across South and West India and retails fashion apparel and accessories for men, women and children.

“As part of the transaction, ALBL will sell assets of the 74 retail stores, warehouses, inventory and the ‘Unlimited’ brand to V-Mart at its book value. ALBL would receive cash consideration estimated at about Rs150 crores upon the closure of transaction and thus, will fully recover the capital employed in the business. In addition, there are contingent payments to be received, based on certain milestones achieved by V-Mart over next few years for these stores, post the acquisition,” Arvind Fashions said in a statement.

Arvind Fashion has been in consolidation mode, offloading and exiting brands and shuttering unviable stores and focusing on power brands. In its latest investor presentation, the company said it completed the exit of brands that it plans to discontinue selling including The Children’s Place, Hanes, Newport and Ruf & Tuf; it already exited Gant, Izod and Nautica in FY20.

Its exit from the GAP franchise has been delayed to the ongoing fiscal.

In FY21—the company drove cost reduction by 40% or an estimated ₹540 crore across rentals, warehouse, manpower optimization, it said in its Q4 and FY21 investor presentation.

The last fiscal has been particularly challenging for apparel retailers as demand for formal and occasion wear took a beating. In July 2020, Flipkart Group bought a minority stake in Arvind Fashions Ltd’s subsidiary Arvind Youth Brands for Rs260 crore. The company, which owns denim brand Flying Machine, plans to build the brand online and in India’s smaller markets.