Aditya Birla Fashion and Retail has signed a memorandum of understanding (MoU) to acquire the Indian division of Forever 21 from Diana Retail.

Aditya Birla Fashion and Retail is the retail unit of Aditya Birla group, while Diana Retail is the Indian franchisee of US-based apparel retailer Forever 21.

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The financial details of the transaction have not been disclosed.

According to the binding agreement, Aditya Birla Fashion and Retail will buy both the online and offline rights of the fashion retailer for the Indian market, reported Business Standard.

"The partnership of Forever 21 and ABFRL will help establish Forever 21 as one of the largest womenswear brand in the country."

The deal now requires statuatory clearances following which a definitive agreement will be signed.

Forever 21 currently has more than 700 stores, which are spread in countries such as US, Germany, China, and Canada.

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It is the fifth largest speciality retailer in the US and sells clothing, footwear, accessories and beauty products. Its brands include Love 21, Heritage and XXI Forever.

Aditya Birla Fashion and Retail managing director Pranab Barua was quoted by The Hindu as saying: "The proposed acquisition is in line with our strategic intent to create the largest integrated branded fashion player in the country.

"With the acquisition of Forever 21 India business, we aim to create a strong foothold in women’s wear in the western wear segment. Currently, the western women’s wear segment is growing at more than 20 per cent."

Forever 21 global expansion director Jatin Malhotra was quoted by Business Standard as saying: "Forever 21 has built a very strong franchise in India in the last few years and has already become a brand of choice for fashion conscious women.

"The young demographics of the country and emergence of fast fashion segment offer opportunity for rapid growth for the brand.

"The partnership of Forever 21 and ABFRL will help establish Forever 21 as one of the largest womenswear brand in the country."

Forever 21 forayed into India in 2010.