Reliance Retail Ventures Ltd (RRVL) acquired a majority stake in fashion designer Ritu Kumar’s firm Ritika Pvt. Ltd on Tuesday, strengthening a growing trend of corporate houses investing in luxury ethnic wear brands.
The transaction’s size was not disclosed, although RRVL acquired slightly more than 52 percent of the company. RRVL, a subsidiary of Reliance Industries, acquired a 35 percent stake in Ritika from Singapore-based private equity firm Everstone. Everstone purchased the stakes in 2014 for $16.6 million (~Rs 100 crore). The Reliance group has purchased an additional 17 percent to gain control of the company.
Ritu Kumar, a designer, and Padma Shri Awardee founded the designer-wear company in 1969. It is predominantly an ethnic and occasion-wear brand. It operates four fashion labels that are sold across 151 retail outlets around the globe. Ritu Kumar launched its luxury bridal couture and occasion apparel Label Ritu Kumar in 2002 for a younger, global audience, as well as its latest addition, aarké, which is an affordable product collection. Ritu Kumar Home & Living is a category extended version of the brand that targets the comfortable luxury home segment.
Reliance has been acquiring fashion labels from all around the globe, as well as Indian brands. Reliance Brands most recently acquired a 40 percent stake in Manish Malhotra’s MM Styles. This is part of Reliance’s significantly larger goal of encouraging home-grown brands with “Indian design sensibilities.”
The company remarked in a statement that the learnings from RRVL’s subsidiaries’ huge retail network, expertise creating and fostering global luxury to premium brands in the country, and deep devotion to Indian craftsmanship will be a compelling platform to build brand Ritu Kumar in the future.
Isha Ambani, Director of RRVL commented on the development saying, relatively few countries can match India’s elegance, creativity, and originality of fashion, particularly in the printing and painting of fabrics and weaves. “We are delighted to partner with Ritu Kumar, who possesses strong brand recognition, the potential for scale, and innovation in fashion and retail all key ingredients to build a complete lifestyle brand.”
Adding further she said, “We are delighted to partner with Ritu Kumar, who possesses strong brand recognition, the potential for scale, and innovation in fashion and retail all key ingredients to building a complete lifestyle brand.”
Reliance at present owns stakes in two other Indian luxury designers brands – Satya Paul and Raghavendra Rathore. In general, Reliance Retail has focused on the premium to the luxury market in the lifestyle and fashion industry.
The acquisition of stakes in Indian luxury fashion designers from Reliance Retail happened at a time when the rival retail corporation in the country, Aditya Birla Fashion & Retail (ABFRL), has chosen a similar strategy of expanding its premium ethnic apparel portfolio.
At the firm’s annual general meeting (AGM) in September this year, ABFRL chairman Kumar Mangalam Birla referred to ethnic wear as one distinct area of concentration for the company, citing it as the largest market in the fashion and apparel industry with a huge profit margin.