L Capital in talks with Indian ethnic wear chain
L Capital Asia, the private equity arm of luxury goods giant LVMH group, is in talks to acquire a minority stake in Fabindia, an Indian ethnic fashion retailer.
Since August of last year, Fabindia has been inviting bids for an INR2 billion ($37 million) raise from new investors, to fund its expansion.
A number of private equity investors including Bain Capital, KKR, Everstone Capital and New Silk Route have shown interest in Fabindia. In November, the Carlyle Group invested in the company via an INR2 billion capital increase and the provision of replacement capital, enabling US-based Wolfensohn Capital Partners to exit its 8% stake in the firm. Wolfensohn, which is owned by former World Bank President James Wolfensohn, acquired its stake for nearly INR500 million in 2007 and had been seeking exit opportunities since last summer.
Founded in 1960, Fabinida is well known for its handmade products. Today, the retail company has 141 retail stores across India and one store in each of Dubai, Nepal and Italy.
L Capital Asia, the $635 million fund manager backed by LVMH, has been making selective investments in brands across China and India.
Last July, it made it first investment in India, purchasing a 25.5% stake in New Delhi-based Genesis, which operates 125 stores and franchises for luxury brands including Just Cavalli, Bottega Veneta and Jimmy Choo. Then, in August, it was reported to be considering investing a further INR800 million into a joint venture with Genesis which would exhibit the Indian firm's fashion pieces.
Recently, L Capital made its maiden mainland investment by funding Xinhe Fashion, a Xiamen-based fashion company with a sales network of more than 600 stores across China. It is now the company's second-largest equity holder.
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