LVMH snaps ties with Genesis Luxury

Unhappy with its partnership with Genesis Luxury,

LVMH-owned L Capital Asia, a major investor in the company has decided to snap ties and has demanded that its founder either buys out its 40 per cent stake or should sell the luxury brands marketing firm completely.

L Capital has also instructed Genesis Luxury to get its financial accounts audited by one of the ‘Big Four’ accounting firms. Genesis Luxury, which was founded by former Citibank executive Sanjay Kapoor, retails and markets several top luxury brands in India such as Jimmy Choo and Armani. While L Capital is an investor in Genesis Luxury, three other private equity funds— Sequoia Capital, Henderson and Mayfield are investors in Genesis Colors, the parent company which owns 60 per cent of Genesis Luxury. As per sources, all the three investors had recently made additional investments by subscribing to the rights issue of Genesis Colors. However, on the other hand, other sources claimed these investments to be very little to keep the company afloat.

Genesis Colors, the parent company, made a loss of Rs 6.7 crore for the year ending Mach 2012 on a total revenue of Rs 119 crores, while Genesis Luxury made Rs 72 lakh profit for the year ending March 2012 on a revenue of Rs 92 crores. Genesis Colors was founded in 2001 and at present is primarily involved in the marketing of three brands, Satya Paul, Tie Rack, and lingerie brand, Bwitch.