Kishore Biyani-led Future Lifestyle is in advanced stages of negotiations with Pepe Jeans to acquire its local arm and merge with its own Lee Cooper portfolio to create one of the country’s biggest casual wear brands, two people familiar with the matter said.
Pepe Jeans India is a fully owned subsidiary of Barcelona-based Pepe Jeans Group, which counts LVMH-owned L Catterton and Lebanese investment firm M1Group as majority shareholders.
“L Catterton is a common investor in both these firms (Pepe and Future Lifestyle) and the deal will be valued at more than `1,200 crore. The due diligence is over and the acquisition will be announced in a few days,” said one of the people. “Both brands put together will have retail sales of over `2,000 crore.”In May this year, L Catterton bought a 10% stake in Future Lifestyle that owns department store formats including Central and Brand Factory, and more than a dozen brands including Indigo Nation and Lee Cooper. The Future Group declined to comment, while Pepe Jeans India chief executive Kavindra Mishra didn’t respond to an SMS and phone calls.
Pepe that operates more than 200 branded outlets in India — most of them franchisee run — was founded by Indian-origin siblings Arun, Nitin and Milan Shah in London in 1973, but has changed hands since. In February 2015, Pepe Jeans and Hackett London — both part of the Pepe Jeans Group — were bought by L Catterton and M1 from Torreal Funds, Arta Capital and L Capital Europe. Spanish entrepreneur Carlos Ortega has a 20% stake in the global clothing company where he is also the CEO. “It makes sense for the Future Group to add Pepe to their portfolio as the brand has a global appeal, growing well and has a strong franchisee. Pepe can also leverage the Future Group’s retail network to strengthen its reach,” said Harminder Sahni, founder of retail consultancy firm Wazir Advisors.