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Reliance Retail acquires majority stake in designer Ritu Kumar’s firm

NEW DELHI :

Isha Ambani-led Reliance Retail Ventures Limited (RRVL), the retail arm of Reliance Industries, has acquired a majority stake in iconic Indian fashion designer Ritu Kumar’s company Ritika Private Limited. Though the size of the deal has not been disclosed yet, RRVL has acquired a little more than 52% stake in the company.

RRVL had acquired the 35% stake that Singapore-based private equity firm Everstone held in Ritika Pvt Ltd after investing $16.6 million in the company in 2014. Reliance bought an additional 17% over and above that.

Back in July 2019, Amrish Kumar, managing director at the fashion house and designer Ritu Kumar’s son, had told Mint that the company was looking to raise money. He had added that Everstone was looking for an exit.

Over the years, the legacy couturier, Ritu Kumar, 76, who started the company in 1969, has set up several new brands across categories. Besides the flagship label Ritu Kumar that sells daily and semi-formal ethnic wear, it launched Ri, a premium bridal and formal wear in 2018, and Label, a more casual contemporary women’s wear brand. An everyday clothing brand Aarké was launched in March this year. The company, with its four fashion labels, has about 151 points of sales in the country and abroad.

Isha Ambani, director, RRVL, said, very few countries can match the sophistication, style and originality of design, especially in printing and painting of textiles and weaves, found in India. “We are delighted to partner with Ritu Kumar and together, we want to build a robust platform and customer ecosystem for our native textiles and crafts – both in India and across the world.”

Darshan Mehta, managing director and CEO of Reliance Brands Limited (RBL), said it was Reliance Retail Ventures, which is also the holding company of RBL, that will be acquiring Ritu Kumar and not RBL.

“When Reliance Brands has to acquire more than 50% of any business, it has to happen through RRVL since a fourth-generation subsidiary cannot be created. Which is why the Manish Malhotra investment of 40% happened under the RBL brand.” RRVL also houses brands like Fresh, Smart, Hamley’s, Ajio and 7Eleven, among others. Mehta did not disclose whether RRVL will expand the number of stores for Ritu Kumar.

He, however, said, RRVL, through its subsidiaries, has the experience of building and nurturing global luxury to premium brands in the country and has a commitment to Indian craftsmanship. “I call this a partnership and not an acquisition. Fashion requires patient money. In fact, anything that is of substance would require that. And that’s what we bring to the table. This is also a strategic investment because this is a business that we truly understand every facet of right from real estate to training people, the supply chain, the craft and marketing,” he said.

Amrish Kumar said when fashion house Ritu Kumar was looking to raise money several years ago, there weren’t too many investors keen on brands in the more premium to bridge-to-luxury segment. However, the landscape has since changed.

“Investors then were looking more at value-driven brands because that was the nature of the market and that’s where the scale was,” he said.

Referring to the Reliance deal, he said, “This is, perhaps, a testament to the graduation of the consumer that strategic or conglomerate investors are looking for brands that have their own DNA and a competitive advantage and are not necessarily just driven by pricing and distribution,” he said.

Reliance Retail reported a turnover of ₹1,57,629 crore ($ 21.6 billion) for the financial year 2020-21. As on 31 March 2021, Reliance Retail operated more than 12,000 stores.

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