Goat Brand Labs Diversified Holdings Unit Sells Innerwear Business Amid Restructuring Efforts

Innerwear Industry Struggles to Scale in India

Goat Brand Labs, a Bengaluru-based e-commerce platform backed by Tiger Global, is exploring the sale of its innerwear brand Pepe Jeans Innerfashion. The company's revenue stands at Rs 50-60 crore, with a valuation of around Rs 200 crore, translating to a revenue multiple of approximately 4x.

Challenges in the Innerwear Market

The innerwear market in India is facing significant challenges, including inventory management, distribution, and pricing. Investors have cited these issues as major hurdles for companies to scale their businesses. Additionally, the lack of product differentiation and limited innovation are putting pressure on innerwear companies.

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Industry-Wide Slowdown

The slowdown in the innerwear market is not limited to new-age companies. Established brands like Jockey, owned by Page Industries, are also facing challenges. In Q4FY25, Page Industries reported a decline in demand, citing a "tepid" retail environment. The company's sentiments did not improve in subsequent quarters.

Struggling Startups

Several startups in the innerwear space are struggling to scale. Damensch, a D2C innerwear and apparel startup backed by Z47, tapped Alvarez & Marsal for corporate turnaround assistance. The company also explored a full-stake sale but received a lifeline from Sangam India, which invested Rs 10 crore.

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Delayed Fundraise

XYXX, an Amazon-backed innerwear and apparel brand, is experiencing delays in closing a fresh funding round. The company was expected to complete the round in late 2025 but has pushed back its timeline due to slower-than-expected growth projections.

Industry Outlook

The innerwear industry in India is facing a testing phase, with consumer demand softening and scaling proving more complex than anticipated. This development raises questions about the viability of roll-up e-commerce companies, which have struggled to achieve success in India.