US private equity fund invests over 244 million dollars in Future Lifestyle Fashion

New York – U.S. private equity firm Blackstone has invested Rs 1,750 crore (244.2 million dollars) in Future Lifestyle Fashion (FLF), India’s Future Group’s flagship fashion business. FLF owns several retail chains including Central and Brand Factory.

The agreement, announced over the weekend, is an equity and debt deal that the lifestyle retailer has used to reduce pledged stock and potentially pare other liabilities.

FLF is the first Blackstone’s investment in the fashion and apparel industry

“This is our first investment in this sector. We look forward to being a value-added investor as FLFL and the Future Group continue to cater to the fashion needs of aspiring India,” highlighted Luv Parikh, managing director, Blackstone said.

Funds managed by Blackstone will invest in Ryka Commercial Ventures, the holding company of the lifestyle retailer through debentures which will be used to retire or pre-close all existing financial obligations, Future Group said in a corporate release. "Blackstone will support us in the continued growth of our fashion business, bringing global perspectives that will help us take FLFL to the next level,” further added Kishore Biyani, Group CEO of Future Group.

Noteworthy, Blackstone acquired about 6 percent stake in FLF for about Rs 545 crore last July, in a secondary market transaction. Biyani and family own 53.43 percent of FLF through entities such as Ryka Commercial Ventures, Central Departmental Stores and Future Enterprises among others. Other investors in FLF include L Catterton and PremjiInvest, which together own around 17 percent, L&T Mutual Fund that owns 4 percent, and LIC with 6.5 percent stake, recalls the ‘Economic Times’.

Both companies have advanced that Blackstone will infuse capital in FLF through a combination of equity and structured debt that will fund the capital expansion of Biyani’s deep-discount retail format Brand Factory, which is modelled on US retailer TJ Maxx, besides improving his promoter-level leverage.

Photo: Central Brand, FLF Official.