LVMH fund in talks with Fabindia for minority stake

L Capital Asia, the private equity arm of the world’s biggest luxury

conglomerate, LVMH Group, is looking at picking up a minority stake in India’s renowned ethnic product store chain Fabindia. Talks are on at present between the two to look at the possibility. Fabindia, one of India’s most profitable retail companies, has been looking to raise Rs 200 crores to fund to fuel its expansion plans and existing operations through a round of fresh equity investments and by buying out the eight per cent stake held by the existing investor, Wolfensohn Capital Partners, which is keen on making an exit.

It may be recalled that in 2007, the fund held by former World Bank President James Wolfensohn, acquired about eight per cent stake in Fabindia for Rs 50 crores. Today, the company is estimated to be valued between Rs 1,000 to Rs 1,200 crores. The promoters, led by William Bissell and his family, own 50 per cent stake in Fabindia.

The over five decade old company Fabindia has 140 stores across the 10 cities in the country that mainly sells textile-based products. They have spread globally with acquisitions and expansions in Dubai, US, UK, Rome and Nepal. As an exporter, Fabindia covers 28 countries.

L Capital Asia, backed by $31 billion LVMH Group, has already made its India debut by picking up 25.5 per cent stake in Sanjay Kapoor-promoted Genesis Luxury Fashion last year. Genesis Luxury franchises leading Italian and British luxury labels such as Canali, Paul Smith, Bottega Veneta, Jimmy Choo, Etro, and the international brand Tumi. Its parent company Genesis Colors owns luxury fashion labels like Satya Paul and Bwitch!