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Pepe Jeans for direct control of India operations

By FashionUnited

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Pepe Jeans has been doing phenomenally well

in India for over a decade. Now, entrepreneur Carlos Ortegaalong, with a group of fellow Spanish financial investors is taking over direct control of Pepe Jeans in India through a joint venture deal with Chetan Shah say sources. The move will help the Madrid-based international parent to gain an economic interest in one of the most dynamic markets in the world. Pepe Jeans has 155 exclusive outlets along with 90 large format stores in India. The stores are located in 81 cities. They have penetration plans in more towns and are looking to grow by entering cities. It is estimated that Pepe Jeans holds around 25 per cent of the market share in the Rs 2,000 crores Indian denim market, which is a commendable figure.

According to the new ownership sharing joint venture, Chetan Shah and associates who completely control the distribution rights for Pepe Jeans in India currently will be given 35 per cent share whilst Ortega, along with European investors Torreal, L Capital and Arta Capital are supposed to buy up to 65 per cent stake in the joint venture.

Reflecting Pepe Jeans’ turnover in India, the transaction could value the joint venture between Rs 250 to Rs 300 crores according to industry sources. Shah has spearheaded Pepe for almost two decades, building it into a leading premium market lifestyle denim brand in the country. He will continue to be at the helm of Pepe Jeans’ Indian operations after the deal.

On the international front, the Pepe Jeans’ management and Spanish private equity company Torreal, which together hold 61 per cent in Pepe Jeans worldwide, had sold around 28 per cent of their holding to Arta Capital and L Capital to raise $110 million. Sources said a part of these funds may be deployed to gain direct control of Pepe Jeans’ Indian operations. Earlier this year, the Spanish owners had approached several retailers such as Shoppers Stop and Landmark Group to partner in Pepe Jeans’ growth in India. However, whilst the search was on, they also considered continuing with Chetan Shah as their partner and have finally decided on him.
Pepe Jeans