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The global fashion business journal

Nov 18, 20194:51pm

Pepe Jeans listens bids to find partner in India

Up to eleven companies, among local operators and investment groups, are interested in taking a majority shareholding in the subsidiary, one of the group’s most important.

May 13, 2019 — 5:00pm
Pilar Riaño
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Pepe Jeans listens to offers to find a partner in India

 

 

Pepe Jeans listens to offers for one of its crown jewels. The company, controlled by the Lebanese M1 fund and based in Barcelona, ​​is currently listening to bids for its business in India, where it has built a long history and is the first denim brand by sales volume.

 

According to what company’s close sources have explained to Modaes.es, although initially Pepe Jeans contemplated giving entry to a minority partner in the country, there are several groups that have shown interest in getting a majority shareholding. The process is limited only to the Indian subsidiary, one of the company’s largest ones.


This decision matches with other strategic movements of the group, that has recently signed up the Rothschild american bank, in order to refinance its debt and has also recruited McKinsey for dealing with its transformation process.

 


Up to eleven companies, within local operators and investment groups, are analizing whether or not to purchase Pepe Jeans’ business in India among local operators and investment groups, according to local media such as Economic Times. Reliance Retail and Future Group are both interested in this particular operation.


Reliance Retail is a subsidiary of Reliance Industries Limited, the Indian biggest listed valued company. The enterprise is also the country’s biggest retailer, with a $10.000 billion revenue. The company is also the partner in the Indian market of firms like Diesel, Replay, Ermenegildo Zegna or Timberland, among others.

 

On the other hand, Future Group is another big business conglomerate, interested in retail, logistics and big consumption industries, between others. The company is also keeping joint ventures with Generali, Celio, Skechers y Clark’s, among other operators.

 

 

Pepe Jeans in India: history of a giant

Pepe Jeans was one of the first fashion western companies in making a huge bet for the Indian market. Nowadays, the corporation is still being the sector’s leader in the country, which is operating in 200 stores, most of them in a franchise regime.

 

The group started the operations in 1973, due to the Indian origin of the Arun, Nitin and Milan Shah brothers, whose origin was set in London. Pepe Jeans landed in India in the 90s, hand in hand with the local businessman Chetan Shah.

 

At the end of that decade, the company’s Spanish directors, Carlos Ortega and Javier Raventós, took control of the company through a management buy out (MBO), accompanied with the fund 3i. It was then when the company started a process to reacquire the brand’s business around the world, including India, where it operated under a license with Shah.


The operation was finally closed in 2010, when the company was already operating with a network of around 150 stores laid out by the country and controlling the 25% of the denim market.

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