Reliance Retail acquires majority stake in designer Ritu Kumar’s business
NEW DELHI : Reliance Retail Ventures Limited (RRVL), the retail subsidiary of Reliance Industries, headed by Isha Ambani, has acquired a majority stake in Ritika Private Limited from iconic Indian fashion designer Ritu Kumar. Although the size of the deal has not yet been disclosed, RRVL has acquired just over 52% of the company’s capital.
RRVL had acquired the 35% stake that Singapore-based private equity firm Everstone held in Ritika Pvt Ltd after investing $ 16.6 million in the company in 2014. Reliance bought an additional 17% more.
In July 2019, Amrish Kumar, managing director of the fashion house and son of designer Ritu Kumar, told Mint that the company was looking to raise funds. He added that Everstone was looking for a way out.
Over the years, historic fashion designer, Ritu Kumar, 76, who founded the company in 1969, has created several new brands across all categories. In addition to flagship brand Ritu Kumar which sells ethnic everyday and semi-formal wear, it launched Ri, a high-end bridal and formal wear in 2018, and Label, a more casual contemporary women’s clothing brand. An Aarké everyday clothing brand was launched in March this year. The company, with its four fashion brands, has around 151 outlets in the country and abroad.
Isha Ambani, Director of RRVL, said that very few countries can match the sophistication, style and originality of design, especially in the printing and painting of textiles and weaves, which are found in India. . “We are delighted to partner with Ritu Kumar and together we want to create a strong platform and customer ecosystem for our native textiles and crafts, both in India and around the world. “
Darshan Mehta, managing director and CEO of Reliance Brands Limited (RBL), said it was Reliance Retail Ventures, which is also the holding company of RBL, that would acquire Ritu Kumar and not RBL.
“When Reliance Brands has to acquire more than 50% of a company, it has to be done through RRVL because a fourth generation subsidiary cannot be created. This is why Manish Malhotra’s 40% investment was made under the RBL brand. RRVL is also home to brands like Fresh, Smart, Hamley’s, Ajio and 7Eleven, among others. Mehta has not disclosed whether RRVL will increase the number of stores for Ritu Kumar.
He said, however, that RRVL, through its subsidiaries, has experience in building and promoting global luxury to high-end brands in the country and is committed to Indian craftsmanship. “I call it a partnership and not an acquisition. Fashion requires patient money. In fact, anything of substance would require it. And that’s what we bring to the table. a strategic investment because it is a business that we truly understand all facets of the law, from real estate to people training, supply chain, craftsmanship and marketing, ”t -he declares.
Amrish Kumar said that when fashion house Ritu Kumar was looking to raise funds several years ago, there weren’t many investors interested in brands in the more upscale segment of the bridge to luxury. However, the landscape has since changed.
“Investors were more interested in value-driven brands then because that was the nature of the market and that’s where the scale was,” he said.
Referring to the Reliance deal, he said: “Perhaps this is a testament to consumer graduation that strategic or conglomerate investors are looking for brands that have their own DNA and competitive advantage and are not necessarily motivated solely by price and distribution, “he said.
Reliance Retail achieved a turnover of ??1,57,629 crore ($ 21.6 billion) for fiscal year 2020-21. As of March 31, 2021, Reliance Retail operated over 12,000 stores.
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