LVMH make significant advances on Indian market, acquiring stake in local retailer

L Capital Asia, the private equity arm of the world’s largest luxury conglomerate LVMH Group and Groupe Arnault, has been making significant advances in India, first with acquiring a stake in leading jeweller Gitanjali Gems and recently with the acquisition of a 25.5% stake in Genesis Luxury Fashion, while it may acquire a further package of 15% in the near future.

When contacted, Ravi Thakran, managing partner of L Capital Asia, over an email query said: "Genesis Luxury will be a leading platform that will partner with global and Indian brands for driving their growth in India. We at L Capital will capitalise on the resources and skills of the LVMH group to help Genesis Luxury in this journey."

The funds will be deployed towards expansion of current business and development of new brands and concepts, he added even as he declined to comment on the stake and investment amount. According to the second person privy to the development, LCapital Asia invested USD 25 million in the first round of investment in Genesis Luxury that closed last week and at the time of the announcement, Thakran had said that the fund did have plans to invest money in tranches depending on the growth capital required by the company.

Established in 2008, Genesis Luxury is the group company of the privately-held Genesis Colors, bringing together a diverse range of brands from top-end men’s wear to travel accessories and bags, among others. It has leading luxury brands, including Satya Paul, Canali,Paul Smith, Just Cavalli andJimmy Choo, among others. "We will be using funds raised to increase the distribution network, increase the retail network and bring new brands into our portfolio and are speaking to several brands," said Sanjay Kapoor, MD at Genesis Luxury.

The investment in Genesis Luxury Fashion will help the private equity fund tap the country’s luxury and designer wear segment, pegged at about USD 250 million  and growing at 30% a year. Industry insiders say that with rising consumerism in the country, the designer and luxury fashion wear segment is increasingly attracting investor interest in the country. Last week, Franklin Templeton Private Equity Strategy acquired a 20% stake Kimaya Fashions for about Rs 60 crore, valuing the designer wear retailer at USD 57 million.

In 2008, Genesis Colors had raised USD 28 million from three investors –Sequoia Capital Fund, Mayfield Fund and Silicon Valley Bank — for an undisclosed stake. The fashion house, established in 2001, owns labels like Satya Paul, Deepika Gehani and designer store Samsaara.

adapted from Economic Times, CPP