Reliance picks up 52% in India’s oldest fashion house Ritu Kumar

NEW DELHI:

Reliance Retail

has acquired 52% equity in India’s oldest fashion house Ritu Kumar days after picking up a significant stake in Manish Malhotra, a desi couture label which has become the staple of Bollywood celebrities.


The stake in ‘Ritika’, the parent of the 76-year-old designer’s numerous brands across categories will give Reliance control over Ritu Kumar,

Label Ritu Kumar

, RI Ritu Kumar, aarké and

Ritu Kumar Home and Living

.

While the size of the deal was not disclosed, the equity acquisition includes Reliance buying Everstone’s 35% stake in the company. The private equity firm had invested $16.6 million in the company in 2014.

Often credited with introducing the concept of designer wear into India, Kumar who started her fashion business in late sixties is known for her work with natural fabrics and traditional weaving techniques.

Reliance’s move to lap up homegrown ethnic designer wear labels comes against the backdrop of rival Aditya Birla Fashion and Retail (ABFRL) stakes in ethnic wear brands such as Tarun Tahiliani, Sabyasachi and Jaypore.

Both companies are aiming to capitalize on these brand names by developing and launching collections in the affordable segment.

For the designers, the fresh capital means a new lease of life as the Covid-19 pandemic has wiped out revenues for retail players.

“Most Indian designers run boutique stores and they lack scale,” said a former senior employee at one of India’s largest couture labels. “The clothes get sold mostly during weddings and the party season. With both subdued for the last two years, you cannot stay afloat for long.”

In fact, the Reliance deal will translate into rapid expansion and scale for Manish Malhotra, who runs four standalone stores across India. With fashion designer Tarun Tahiliani, too, ABFRL will own 80% stake in a new entity that will launch more affordable ethnic wear and accessories.

The Ritu Kumar business currently includes four fashion brand portfolios which cumulatively retail out of 151 point of sales globally.

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