Investor interest in women’s fashion on the rise

With fashion becoming the highest selling category online and offline and a rising number of women turning to high-fashion wear, investors’ interest in this category is increasing by the day. A case in point is Ritu Kumar known globally for her designer collections, some

time ago, private equity (PE) firm Everstone Capital had announced its plans to pick up a minority stake in fashion label Ritu Kumar with an investment of Rs 100 crores.

Ethnic

labels attract investment

Women’s ethnic wear market in India is seeing steady growth and PE investors are showing keen interest in grabbing a stake in women centric brands. For example, sometime back PE firm General Atlantic bought a minority stake in AND Designs India. Similarly Warburg Pincus and Faering Capital invested about Rs 300 crores in Biba Apparels, a brand that offers women and girls’ ethnic wear.

According to retail consultancy firm Wazir Advisors, the ethnic wear market in India is expected to grow at 12 percent by 2018 to Rs 500,000 crores from the current market size of Rs 250,000 crores. The women's ethnic wear market is expected to expand by 14 percent to Rs 1.75 lakh crore in 2018.

It may be recalled that after relisting his company, Kishore Biyani, who had invested in BIBA and Anita Dongre’s AND sold his stake in both these companies at three times the investment he made to streamline his businesses and reduce debt. Other ethnic wear players like TCNS Clothing, best known for its women’s wear brand 'W' had received first round of funding of Rs 60 crores from PE firm Matrix Partners in 2011. Fabindia too has attracted private equity funding.

Women’s fashion -high margin biz

Perhaps what’s driving investors is that returns from women’s fashion are higher. As per a Research & Markets report ‘Indian Women Wear Market Forecast to 2015’, the women’s wear industry will grow at a CAGR of around 11 percent during 2013-2015. Thanks to rapid urbanization and increasing working class, the price sensitive Indian consumers are now shopping more frequently. The growing fashion consciousness has turned women's wear segment into a lucrative and highly evolving market.

This could explain why investors are showing interest even in ecommerce platforms focusing on women’s fashion apart from offering private fashion labels. Experts point out that fashion is a promising business even online. Leading e-commerce players, Myntra and Jabong, Flipkart, for instance, are vying to grab a big piece of the country's fashion retail pie estimated at 60 billion dollars (over 37,000 crores), including online and offline apparel trade, most of which lies in the unorganised sector. And many existing Indian brands too are planning to expand reach of women’s wear labels under their portfolio. Van Heusen from Madura Fashion and Lifestyle, for example will add 10 standalone women’s wear stores over the next 12 months to its existing 10. The category is now witnessing growth at 40-50 percent year-on-year. Arrow, which introduced women’s formal wear in 2009 has been witnessing the sales growth of its women’s range at key account stores is much higher compared to men’s formal wear.