Future Lifestyle Fashions (FLF) is reportedly selling a 10% stake to L Catterton Asia through ‘a mix of preferential allotment and secondary purchase of shares.’
The exact sum of investment has not been disclosed but observing FLF’s current stock price of INR 420.5/share, the deal is estimated to have been approximately INR 800 crores.
Backed by global luxury conglomerate LVMH, L Catterton is the world’s biggest consumer-focussed venture capital and private equity firm. The firm whose last investment in India’s fashion industry was Fabindia back in 2012, is breaking a long term hiatus for FLF.
The Singapore-based wing of the international firm cited FLF’s vertically integrated business model that takes care of everything from ‘design to distribution’, as the main reason behind their interest in the Indian retailer.
Narayan Ramachandran, Vice Chairman and MD, L Catterton-India, Asia added, “Of the 31 brands, six ‘power brands’ including Lee Cooper, Jealous 21, Scullers, Indigo Nation, All, John Miller, have been identified as key drivers of future growth.”
Ramachandran also mentioned that while FLF operates over multi-brand 400 stores, its in-house brands contribute about 40% of revenue. In addition to this, the retailer also operates the country’s largest multi-brand discount outlet channel called Brand Factory that “caters to value-seeking aspirational Indian customers and has no direct competition in the market.”
While the investment firm stands to gain from the growing consumptions in the Asian market from the deal, it will also bring an international level of retail expertise to the FLF board.