Biyani to sell stake in Lee Cooper

MUMBAI: Future Group founder Kishore Biyani has mandated Kotak Mahindra Bank to find a financial backer for Lee Cooper’s apparel business which is expected to be valued at $200 million, or more than Rs 1,200 crore, people directly involved with the matter said.
Future Lifestyle Fashions (FLF), which controls the domestic rights for the brand, is looking to bring in a financial investor who will hold a large minority interest in the business.The asking valuation of Lee Cooper’s Indian business is over 16 times its operating profit of nearly Rs 70 crore last fiscal, making it the most valuable market for the 100-year-old British denim brand.
In 2007, Biyani started as a joint venture partner to Lee Cooper India, but later took full charge of the local operations. The global ownership of the brand rests with Nasdaq-listed Iconix Brand Group, which it acquired from Sun Capital Partners two years earlier. Incidentally, Biyani had also placed a bid to acquire Lee Cooper’s worldwide rights at that time.
When contacted by TOI, Biyani declined to comment on the development.
Sources cited earlier told this newspaper that FLF had started a process to bring in a private equity investor who could fuel Lee Cooper’s growth in India and neighbouring markets. While a potential investor could hold at least 26%, sources said the stake on offer would depend on negotiations.
Industry watchers said the move was part of Biyani’s plan to monetize his fashion assets which he has helped grow in the past decade. Biyani’s asking price for Lee Cooper may be high but the brand benefits from leveraging his fashion retail formats like Central, Brand Factory and Fashion at BigBazaar (FBB), among others, for a bulk of the revenue.

FLF — a fashion retailer and brand asset manager — has a portfolio of nearly 30 fashion brands. Biyani’s move to bring an equity partner into the Lee Cooper unit will be keenly followed by Iconix, which has an India presence through a joint venture with Reliance Brands, a privately held arm of Reliance Retail.
Future Retail de-merged its fashion business in 2012 and formed Future Lifestyle Fashions. In 2013, Future Lifestyle Fashion had divested minority stakes in ethnic wear brand Biba Apparels and fashion designer Anita Dongre-owned AND for Rs 450 crore to private equity players. These exits had given the group a return of about Rs 200 crore.