“Reliance will be taking a substantial controlling stake,” said one of the persons. “The promoters will retain a minority stake in the company.”
A spokesperson for Reliance Brands declined to comment on “speculative news”. Amrish Kumar, managing director of Ritu Kumar, did not respond to phone calls or text and WhatsApp messages while Everstone senior director Prashant Desai declined to comment.
Ritu Kumar owns four designer brands including Label, RI, Aarke and Ritu Kumar Home. The five-decade-old company had been in the market for years to raise money to fund expansion. Reliance has been aggressively buying retail brands to shore up its leadership in a market in which it’s largely pitched against Amazon and Walmart-owned Flipkart.
Reliance Brands could announce the deal as early as next week, said one of the persons cited above.
With this deal, Everstone will exit the Indian designer brand that operates about seven dozen physical outlets. Everstone had invested about ₹100 crore in the New Delhi-based designer retailer to pick the stake in 2014.
Reliance Brands, the premium-to-luxury brands operator of Reliance Retail, markets about four dozen global premium-to-luxury labels including Burberry, Bally, Gas, Kate Spade, Diesel, Brooks Brothers and Steve Madden among other labels. A 2019 acquisition of smaller rival Genesis Luxury gave Reliance Brands sway over Salvatore Ferragamo, Jimmy Choo, Giorgio Armani, Michael Kors, Paul Smith among other famed labels.
Bullish on Indian Designers
Large corporate houses have been bullish on Indian designers with the market for ethnic clothing brands growing exponentially before the pandemic.
In February this year, Aditya Birla Fashion and Retail (ABFRL) forged a partnership with designer Tarun Tahiliani for an entity that will launch a contemporary men’s ethnic wear brand. As part of the deal, ABFRL will also acquire a 33% stake in Tahiliani’s luxury couture business. Prior to that, in January, ABFRL purchased a 51% stake in India’s biggest luxury designer brand Sabyasachi. In 2019, ABFRL had acquired 51% stake in Finesse International Design, that runs bespoke apparel retail brand Shantanu & Nikhil, for ₹60 crore.
Reliance Retail, the country’s largest retailer by revenue and by the number of outlets, has also been on a shopping spree over the past year, buying companies such as online pharmacy Netmeds, furniture and home decor retailer Urban Ladder and digital lingerie seller Zivame.
Reliance Retail last year completed the “largest fund raise exercise in the sector” to the tune of ₹47,265 crore from global private equity funds for a 10.09% stake, valuing it at over ₹4.2 lakh crore.
Fashion designer Ritu Kumar started her eponymous brand with a store in New Delhi in 1969. Over the decades, it became popular for contemporary designs such as suits, tunics, lehengas, ethnic jackets, and bridal collections.