India’s Future Lifestyle Fashions to acquire 29.9 percent stake in London-listed Koovs.com

India’s apparel group Future Lifestyle Fashions Ltd. will acquire a 29.9 percent stake in e-commerce fashion retailer Koovs, becoming the largest shareholder in the London-traded fashion site.

“This investment would complement the existing value chain for FLFL as an integrated branded fashion player. FLFL’s strong retail presence backed by owned brands coupled with Koovs online strategy will help reach more customers and create value for all stakeholders,” said Future Lifestyle Fashions’ owner in a statement.

Subject to conditions, under existing shareholder authority, Koovs will issue FLFL with 57,876,600 new ordinary shares, representing 24.8 percent of the current issued share capital, raising 5,787,660 pounds in cash, said the statement.

“Lord Alli has committed to invest 1.5 million pounds in the equity raise and FLFL (Future Lifestyle) has conditionally agreed to make additional investments to take its ownership up to 29.9 percent within six months of completion of the equity raise,” the Koovs statement said.

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“The transaction will be done in two phases and will also involve other investors making further investments in the entity,” a person familiar with the deal told ‘Economic Times’. “It will make Future Group the largest shareholder and manager of the entity.”

“This acquisition will give FLFL access to an online fashion platform, which had been missing from its portfolio. This acquisition will be synergistic in terms of both departmental store formats and brands,” said in a note to investors Jefferies. “With this online foray, FLFL will be able to operate an omnichannel play along with its physical store network and push its own brand portfolio.”

It’s worth recalling that Future Lifestyle is cash-rich after selling 10 percent stake in May to LVMH Moët Hennessy Louis Vuitton-owned private equity fund L Catterton Asia. A source close to the matter advanced that Future Lifestyle’s owner, Kishore Biyani, will use the money from the L Catterton sell-off to buy a stake in Koovs.

“We like their (Koovs) positioning as they are high on curated fashion and we can bring synergies. Online fashion has taken off in India and we think we can make Koovs big and viable,’’ Biyani told local press earlier this month. “It gives us a platform to sell our other existing portfolio.” Currently, Biyani’s fashion arm markets a portfolio of more than two-dozen global and local brands including Lee Cooper, Indigo Nation, Scullers, Clarks, John Miller, Jealous 21, Cover Story.

Founded in 2012 by Waheed Ali, a former chairman of ASOS, Koovs registered a sales of 7.9 million pounds for a six-month period ending September 30, 2017. Koovs curates fashion from various international brands targeted at 18-34 years old Indian youth and about 40 percent of the company’s sales come from its private labels.

Image:Koovs website