Ritu kumar: Reliance takes 52% in India’s oldest fashion house Ritu Kumar
The stake in ‘Ritika’, the parent company of the 76-year-old designer’s many brands across all categories, will give Reliance control of Ritu Kumar, Label Ritu Kumar, RI Ritu Kumar, aarké and Ritu Kumar Home and Living.
While the size of the deal was not disclosed, the share acquisition includes the purchase by Reliance of Everstone’s 35% stake in the company. The private equity firm had invested $ 16.6 million in the business in 2014.
Often credited with bringing the concept of designer clothing to India, Kumar, who started her fashion business in the late 1960s, is known for her work with natural fabrics and traditional weaving techniques.
Reliance’s decision to launch local ethnic designer clothing brands comes against the backdrop of Aditya Birla Fashion and Retail (ABFRL) rival stakes in ethnic clothing brands such as Tarun Tahiliani, Sabyasachi and Jaypore.
Both companies aim to capitalize on these brands by developing and launching collections in the affordable segment.
For designers, the new capital means a new lease of life as the Covid-19 pandemic has wiped out the incomes of retail players.
“Most Indian designers run boutiques and they lack scale,” said a former senior executive at one of India’s biggest couture brands. “The clothes are sold mainly during weddings and the holiday season. With both submissive over the past two years, you can’t stay afloat for long. ”
In fact, the Reliance deal will result in rapid expansion and scale for Manish Malhotra, which operates four stand-alone stores across India. With fashion designer Tarun Tahiliani also, ABFRL will own 80% of the capital of a new entity which will launch more affordable ethnic clothing and accessories.
The Ritu Kumar business currently has four portfolios of fashion brands that cumulatively retail out of 151 outlets around the world.