Kishore Biyani-led Future Lifestyle Fashions Limited has agreed to pick a 29.9 per cent stake in fashion e-tailer Koovs plc. This comes after Wal-Mart announced a deal to buy a significant stake in e-tailer Flipkart and Biyani questioning e-commerce business models.
Koovs will issue 57,876,600 new ordinary shares to Future Lifestyle at a price of 10 pence apiece, representing 24.8 per cent of its enlarged issued share capital, for £5,787,660 (Rs 525 million, $7.6 million). Two representatives Future Lifestyle will join Koovs' Board of Directors in due course.
In addition, Koovs today also announced the formal opening of a bookbuild to raise up to £10 million of equity at a price of 15 pence per share. Future Lifestyle has agreed to make additional investments to take its ownership up to 29.9 per cent within six months of the equity raise. Koovs has also allotted the first tranche of £4.2 million of new ordinary shares to HT Media after an announcement on June 18.
Kishore Biyani, Future Group Managing Director and Group CEO, said: "In Future Lifestyle, we have successfully created, grown and invested in leading Indian fashion brands and are excited to partner with Koovs to continue building on the company's ambition. This investment would complement the existing value chain for Future Lifestyle as an integrated branded fashion player. Future Lifestyle's strong retail presence backed by owned brands coupled with Koovs online strategy will help reach more customers and create value for all stakeholders."
Lord Alli, Chairman of Koovs, said: "This marks a giant step forward in the Koovs' journey to win the e-fashion market in India. FLFL with its leadership position as an integrated branded fashion player and the Koovs brand and technology platform are an unbeatable combination. This investment will bring enormous benefits to our customers and partners as well as significant value for all shareholders."
Future Group is among India's leading consumer goods companies with brands and retail networks in the fashion, food and homeware segments. It owns over 60 brands, operates close to 2,000 retail stores spanning over 22 million square feet and attracts footfalls of over 500 million annually. Future Group also has one of India's most unique digital payment platforms, Future Pay, which has an active user base of over 6.5 million and is growing rapidly. Future Group sells some 30 crores of garments in volume making it one of the top 10 fashion apparel companies in the world.
FLFL owns and markets some 30 fashion brands through exclusive brand outlets, department stores and multi brand outlets, as well as company-operated chains such as Central and Brand Factory. FLFL collectively operates more than 400 stores encompassing over 6 million square feet of retail space and is a unique player in the Indian fashion industry due to its integrated "design to distribution" model and presence across all key segments within the fashion industry.
With support from a large retail channel, FLFL also leverages its strong portfolio of own brands that contribute to approximately 40 per cent of total sales, thereby creating a distinctive, integrated fashion play. Led by Lee Cooper, its top six 'power brands' contribute approximately 60 per cent of FLFL's revenue from own brands.
FLFL has also successfully invested in fashion brands like BIBA and AND in the past and currently holds investment in other brands like Clarks, Cover Story and Celio.