Blackstone commits $244m to India's Future Lifestyle Fashions
The Blackstone Group has agreed to invest INR17.5 billion ($244 million) in India-listed clothing retailer Future Lifestyle Fashions (FLF).
The capital will be split across FLF and its holding company Ryka Commercial Ventures, which is controlled by Kishore Biyani, owner of Indian conglomerate Future Group. The investment will deliver Blackstone a 6% stake in FLF and establish the GP as the only financial investor in Ryka.
It comes five months after Blackstone agreed to invest INR5.4 billion in FLF for a separate 5.8% stake. Both investments have been proposed via the firm’s tactical opportunities platform, which targets time-sensitive, complex, and in dislocated markets where risk is considered fundamentally mispriced.
“This is our first investment in this sector,” Luv Parikh, a managing director at Blackstone, said in a statement. “We look forward to being a value-added investor as [FLF] and the Future Group continue to cater to the fashion needs of aspiring India.”
FLF is one of India’s largest fashion companies with a portfolio spanning some 30 owned and licensed brands. It owns the national distribution rights for global names such as John Miller, Umbro, and UMM, along with a number of its own clothing lines.
The company claims differentiation in a “design to distribution” strategy that allows it to set trends and an Indian idiom for fashion. Customer facing outlets include the Central and Brand Factory chains, which target the premium and discount markets, respectively, via a combined 346 locations.
Revenue improved 26% during the 2019 financial year to INR54 billion, while net profit increased 36% to INR1.5 billion. Shares in the company have declined 5% since the start of the month and have traded around the INR395 mark for the past week.
The stock traded as high as INR470 in July when Blackstone initially announced intention to invest. This coincided with a INR3 billion commitment from Aion Capital Partners, a joint venture between Apollo Global Management and ICICI Venture, the latter of which is a former FLF shareholder. FLF’s other private equity shareholders include L Catterton, PremjiInvest, and Apollo Global Management.
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