Blackstone, the largest private equity firm in the world, has invested Rs1750 crore in Future Lifestyle Fashion, the Kishore Biyani-owned Future Group’s flagship fashion sector.
Funds operated by Blackstone will invest in Ryka Commercial Ventures, the fashion retailer’s holding company via debentures that will be used to remove or pre-close all existing financial obligations, said Future Group.
“Blackstone will support us in our fashion business ‘ continued growth, bringing global perspectives that will help us bring FLFL to the next level,” said Kishore Biyani, Group CEO of Future Group.
In July this year, in a secondary market transaction, Blackstone had acquired about a 6 percent stake in FLF for about Rs 545 crore. Biyani and the family own 53.43% of FLF by, among others, companies such as Ryka Commercial Ventures, Central Departmental Stores and Future Enterprises. Certain FLF shareholders include L Catterton and PremjiInvest, which together own about 17 percent, L&T Mutual Fund, which owns 4 percent, and LIC, which holds 6.5 percent.
“This is our first business project. While FLFL and the Future Group continue to meet the fashion needs of aspiring India, we look forward to being a value-added investor, “said Luv Parikh, managing director, Blackstone.
In addition to raising its promoter-level leverage, Blackstone will infuse money in FLF through a mix of equity and structured debt that will fund the capital expansion of Biyani’s deep-discount retail concept Brand Factory, based on US retailer TJ Maxx.
From food and grocery retailing, Future Group generates its largest chunk, but the apparel and lifestyle segment is a higher margin business. With revenues of Rs 5,728 crore, FLF grew 27 percent last fiscal year. The company also manages almost 30 brands including Indigo Nation and Lee Cooper through 339 stores spread over 7.2 million square feet of retail space.
World’s biggest equity firm, Blackstone has acquired about 6 percent stake in Future Lifestyle Fashion, the flagship business of Kishore Biyani-owned Future group, for about Rs. 545 crore. According to National Stock Exchange (NSE), Promoter entity of Future Lifestyle Fashion, Ryka Commercial Ventures Private Limited has sold 11.6 million shares of Future Lifestyle Fashion (FLF) to Blackstone TacticalBlackstone Tactical Opportunities Fund, BTO FBI III, in a secondary market transaction. The transaction value was Rs 466.25 per share. Recently, The retailer which owns Central and Brand Factory retail chains had said that it will raise about Rs. 300 crore from AION Capital Partners through preferential allotment of shares.