Everstone Capital invests $16.6M in fashion label Ritu Kumar

Private equity firm Everstone Capital has picked a minority stake by investing Rs 100 crore ($16.6 million) in fashion label Ritu Kumar.

Established in 1969, Ritu Kumar is a fashion house catering to a wide range of women’s clothing, including bridal, formal and western wear. It caters to premium Indian couture, with designs that incorporate traditional hand-crafted textiles and embroidery.

It has three distinct brand offerings: Ri, a premium bridal and formal wear line, Ritu Kumar, a traditional pret brand offering ethnic every day and semiformal wear besides Label, a fashion pret line.

Sameer Sain, co-founder and managing partner, Everstone Group, said, “We are delighted to partner with Ritu Kumar, whose brand has put India’s rich craftsmanship and heritage on the global map.”

Ritu Kumar, founder and director of the fashion house, said, “The modern professional approach of any enterprise is to collaborate with companies such as Everstone which bring to the table, expertise and financial commitment to help in the growth of the brand.”

Amrish Kumar, director and CEO, Ritu Kumar, said, "In the last seven years we have been developing structures within the company including sub-brands and product lines to create scale in the premium and luxury segments. We believe that the time is right both internally and in the macro environment for the infusion of growth capital.”

Langham Capital was the financial advisor in the transaction.

According to a study by consultancy firm Technopak, the women’s segment currently accounts for 87 per cent of the total ethnic wear market which is pegged at Rs 54,425 crore. It is the growth of this segment that will continue to drive the overall sector. The women’s wear segment alone is expected to grow at 8 per cent over the coming decade.

In the premium segment of women’s ethnic wear, there are national players such as BIBA and ‘W’, to name a few, while strongly entrenched local players dominate their respective geographies. Neeru’s in Hyderabad, Frontier Bazar and Bombay Selections in Delhi and Jashn in Mumbai are some examples.

The women’s ethnic brands have also seen a lot of PE investments in the last one year. In January this year, Future Lifestyle Fashions (FLF), the fashion apparel, accessories and associated products arm of Kishore Biyani-led Future Group, picked up 27.5 per cent stake in Resource World Exim Pvt Ltd, a company engaged in women’s fashion apparel business under the brand 'Desi Belle'.

In December last year, PE firms Warburg Pincus and Faering Capital invested approximately $46.8 million (Rs 300 crore) to buy a stake in BIBA Apparels, a women’s and girls' ethnic wear brand in the country. The deal also provided an exit to the existing investor FLF in the largest private equity investment in the Indian ethnic wear market to date.

Also, General Atlantic bought a significant minority stake in fashion apparel firm AND Designs for around Rs 150 crore. This also gave an exit to the company’s existing investor FLF. AND Designs owns the brands AND, Global Desi and Anita Dongre, named after the Mumbai-based fashion designer who is one of the promoters of the privately held company.

(Edited by Joby Puthuparampil Johnson)

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