Sanjay Lalbhai-controlled Arvind has finalised a deal to buy out 49 per cent stake jointly held by the Murjani Group and the US-based private equity fund Matrix Partners in Calvin Klein India for close to Rs 100 crore. The deal will help the denim major widen its ties with its existing joint venture partner American clothing giant Phillips-Van Heusen Corp for Tommy Hilfiger brand.
The negotiations, which started last year, culminated in a transaction five days ago and a formal announcement is expected soon. Ambit Corporate Finance was the sole advisor to the deal. While the Murjani Group holds 25 per cent in the joint venture, Matrix holds the rest 24 per cent. The deal also signals Arvind Groups founder Sanjay Lalbhais ambition to grow in the mid-premium segment of the apparel market by forging alliances with marque overseas brands.
It all started in 2003 when Arvind struck a joint venture with Murjani Group to sell Tommy Hilfiger in India. Though the worldwide ownership of Tommy Hilfiger moved to Phillips-Van Heusen, Arvind continued to be the Indian partner. Two years ago, Arvind acquired the business operations of British fashion retailer Debenhams, Next and American lifestyle brand Nautica in India from Ramesh Tainwala-led Planet Retail.
Though the move was an attempt to boost market share in kidswear, womenswear and sportsware segments, the economic downturn triggered a sharp fall in customer purchases, leaving some retail brands struggling. Experts feel that these alliances allowed Arvind to consolidate brands under a single umbrella and offer a one-stop platform for aspirational customers.