Kishore Biyani is buying a significant stake in London-listed online fashion retailer Koovs.com, his latest attempt to crack the e-commerce fashion market after his unsuccessful 2016 bid to buy Jabong.com, that was subsequently bought over by Flipkart’s unit Myntra. This is as per a report by the Economic Times.
Biyani’s Future Lifestyle Fashion will acquire about 30% stake in Koovs for about Rs 140 crore and that will make the Future Group company the largest shareholder in the AIM London-listed fashion e-commerce company that sells its private labels and curated fashion and lifestyle products.
Subject to conditions, Koovs will issue Future Lifestyle with 57,876,600 new ordinary shares at a price of 10 pence per share, representing 24.8% per cent of the enlarged issued share capital, raising £5,787,660 of cash, according to a statement in Koovs’ website.
Lord Waheed Alli founded Koovs Plc in 2012. He was previously Chairman of ASOS plc (British online fashion retail company) between 2000 and 2012. He has extensive knowledge of international fashion, coupled with a keen eye for innovation. Waheed was appointed to the House of Lords in 1998 and is currently Chairman of Silvergate Media Holdings Limited, part of a group of media companies which specialise in children’s television, publishing and merchandising. This is as per the company’s website.
In an interview with an Indian business publication in 2017, he has said that his mission is to transform KOOVS from a deals website to one of India’s leading affordable western fashion destination.
Koovs India was established in May 2010 by Rajesh Kamra, Manish Tewari, Kanishk Shukla and Amit Shukla as a general e-commerce business. In August 2011, Infotel E-Commerce Pvt Ltd, a company controlled by the Nahata family, acquired a controlling interest in Koovs India, initially focusing on the sale of mobile phones and other electronic goods. It later pivoted to become an e-tailer of fashion apparel and accessories. It now offers a mix of private label and branded merchandise.
Silvergate got associated with Koovs India in September 2012. In April 2013, Alli and Robert Bready joined Koovs plc as chairman and creative and retail director, respectively. This is as per a report in VCCIRCLE.
Koovs plc raised £22 million ($37 million then) by floating on London’s AIM stock market two years ago. AIM is a sub-market of the London Stock Exchange, which allows smaller companies to float shares with a more flexible regulatory system than is applicable to the main market.
After listing, Alli’s holding in Koovs plc has shrank, but he remained the single-largest shareholder. He held a 26.9 per cent stake in Koovs. This will now move up to 28.7 per cent.
“Lord Alli has committed to invest £1.5m in the equity raise and FLFL (Future Lifestyle) has conditionally agreed to make additional investments to take its ownership up to 29.9% within six months of completion of the equity raise,” the report quotes the company.
“The transaction will be done in two phases and will also involve other investors making further investments in the entity,” the report has quoted a person familiar with the deal. “It will make Future Group the largest shareholder and manager of the entity.”
Koovs curates fashion from various international brands targeted at 18-34 years old Indian youth and about 40% of the company’s sales come from its private labels. The company at present has a revenue of about Rs 200 crore.
Future Lifestyle is cash-rich after selling 10% stake in May to LVMH Moët Hennessy Louis Vuitton-owned private equity fund L Catterton Asia for about Rs 900 crore. Biyani will use the money from the L Catterton sell-off to buy stake in Koovs that sells mostly private labels through its website.
“We like their (Koovs) positioning as they are high on curated fashion and we can bring synergies. Online fashion has taken off in India and we think we can make Koovs big and viable,’’ the ET report has quoted Kishore Biyani. “It gives us a platform to sell our other existing portfolio.”
Future Lifestyle markets a portfolio of more than two-dozen global and local brands including` Lee Copper, Indigo Nation, Scullers, Clarks, John Miller, Jealoys, CoverStory, aLL among others and also own Brand Factory chain and Central, a large department store chain.
This would be Biyani’s latest stab at e-commerce two years after a failed acquisition of online furniture seller FabFurnish.com from Germany-based Rocket Internet. Last year FabFurnish was closed down.