Blackstone bets $167 mn more on Future Group’s fashion business

Blackstone Group Inc., the world’s largest private equity firm, has invested Rs 1,200 crore ($167 million) in the holding company of Future Lifestyle Fashions Ltd.

The investment in Ryka Commercial Ventures Pvt. Ltd adds to the Rs 550 crore the PE firm had invested in Future Lifestyle through its Tactical Opportunities, or Tac Opps, unit in July.

Overall, Blackstone has invested Rs 1,750 crore via shares and debentures. As part of the transaction, the PE firm has acquired a 6% stake in Future Lifestyle through a block deal with Ryka, according to a press statement.

Ryka is the holding company for some Future Group companies including Future Lifestyle, Future Retail Ltd and Future Consumer Ltd. It held a 52.2% stake in Future Lifestyle at the end of the June, stock-exchange data show.

Blackstone will now be the sole financial partner in Ryka. This is also the PE firm’s first investment in the fashion lifestyle segment in India, said Luv Parikh, managing director at Blackstone.

Future Group also said that it has used the capital to retire all existing financial obligations of Ryka. Future Lifestyle and Future Group also expect to benefit from Blackstone’s portfolio operations team, it added.

“Blackstone will support us in the continued growth of our fashion business, bringing global perspectives that will help us take FLFL to the next level,” said Kishore Biyani, group CEO at Future Group.

Future Lifestyle

Founded in 2012, Future Lifestyle markets about 30 fashion brands through company-operated chains such as Central and Brand Factory and exclusive brand outlets, department stores and multi-brand outlets. It operates more than 400 stores spread over 6 million sq ft of space.

In July, the fashion arm of the Biyani-led retail group had raised Rs 300 crore from private equity fund AION Capital Partners.

Separately, in July 2018, Future Lifestyle raised capital from consumer-focussed private equity firm L Catterton Asia. L Catterton also acquired shares from PremjiInvest, the family office of Wipro’s Azim Premji. Another investor in Future Lifestyle is media house Bennett, Coleman & Co. Ltd.

In another recent deal involving the retail group, Future Consumer Enterprises raised capital from International Finance Corporation and Verlinvest in May.

Blackstone’s India bets

The investment in Future Lifestyle is one of the PE firm’s four deals in India this year outside the real estate sector. The real estate sector has been the main driver of Blackstone’s India dealmaking activity over the past few years. Outside of real estate, it was doing one deal a year on an average across its different business units.

The other deals it sealed this year were for Aakash Educational Services, Aadhar Housing Finance Ltd and Essel Propack Ltd.

Blackstone was last as active almost a decade ago when it was doing smaller deals in India.

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