Deal focus: L Catterton enters Japan with Owndays

When planning its first deal in Japan after more than a decade of investing in Asia, L Catterton knew it needed more than a strong consumer brand: the GP wanted a partner that could showcase its brand-building expertise. Tokyo-based eyewear retailer Owndays was the answer. L Catterton recently acquired a controlling stake in the company alongside a unit of Mitsui & Co. for an undisclosed sum. The business stood out as a rare achiever of national scale in a fragmented, niche market.

"Japan has thousands of mom and pop stores catering to the eyewear market, but nobody had really gained scale except for Jins and Owndays," says Ravi Thakran, chairman and managing partner of L Catterton Asia. "And we found the Owndays concept enormously innovative – they can do all your tests, give you your glasses, and be done in as little as 20 minutes. This is a unique customer service model that doesn't exist anywhere else."

While Mitsui will contribute to the company's domestic growth, L Catterton plans to help Owndays accelerate its expansion, particularly in international markets. The company already has 142 stores across developed and emerging economies in Asia, in addition to the 115 in its home market, and plans to open 500 more in the next five years. CEO Shuji Tanaka was attracted both by the firm's expertise in fashion and retail through its connection to luxury goods giant LVMH, and by L Catterton's success in turning companies like fashion retailer Charles & Keith into regionally recognized names in Asia.

"He's done a great job so far, but he knows that we could take the concept to a much higher level – tell the story better, design the stores better, and improve the customer experience in those stores," Thakran says.

The Owndays investment is L Catterton's seventh deal from its third fund, which AVCJ understands is targeting a final close of around $1.5 billion by the end of the year. So far, $650 million has been deployed from the vehicle, with nearly $500 million in co-investments by LPs.

The firm expects Japan to account for a growing share of its deal flow; there are currently three more transactions in the pipeline and Thakran believes the firm will make at least one investment per year in Japan from now on. It is particularly interested in entrepreneurs who have built innovative companies with a strong following among domestic consumers, but need help turning that local success into strong international brands – an area where Japanese companies have traditionally struggled to compete with brands from western markets.

"In brand after brand, we can see that they are very shy about shouting out their achievements and telling the story in the strongest way," says Thakran. "To take a beautiful product or concept and make that into a great brand with a great story takes some work, and that is where I think we are an obvious attraction for Japanese companies."   

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• Topics
• North Asia
• Consumer
• Healthcare
• Buyouts
• Japan
• L Catterton