Reliance Brands May Acquire Zivame, Buys Out Ronnie Screwvala’s Share

SUMMARY

Reliance Brands operates premium labels such as Hamleys, Jimmy Choo, Armani among others

The acquisition may also lead to an exit of other investors Zodius Capital and Khazanah Nasional Berhad

Zivame was looking to break even by the December 2020, CEO Amisha Jain had confirmed

Reliance Brands is reportedly looking to acquire 100% stake in lingerie retailer Zivame for $160 Mn (nearly INR 1,200 Cr). The Mukesh Ambani-led company has already acquired a 15% stake held by Ronnie Screwvala-owned Unilazer Ventures last week, Screwvala has confirmed.

Though Zivame is yet to respond to Inc42’s query on the acquisition. Notably, Reliance Retail arm Reliance Brands operates premium labels such as Diesel, Superdry, Brooks Brothers, Burberry, Coach, Diesel, Gas, Giorgio Armani, Hamleys, Jimmy Choo, Kate Spade New York, Steve Madden.

According to an Economic Times report citing sources, the round may also lead to the exit of other Zivame investors like Zodius Capital and Malaysian sovereign fund Khazanah Nasional Berhad. Zodius is the largest shareholder in the lingerie startup with about 60% stake. Khazanah Nasional Berhad owns about 25%.

Founded in 2011 by Richa Kar and Kapil Karekar, Zivame began its operations as an aggregator of lingerie brands. Now along with lingerie, the startup has also entered into other segments such as activewear, sleepwear and shapewear.

The company claims to have an offline presence with over 30 retail stores and over 800 partner stores across India. At present, almost 42% of sales for Zivame come from Tier 2 and Tier 3 cities, where online sales are being complemented by physical retail outlets.

In the financial year 2019, the company had narrowed down its losses by 44% to INR 19.5 Cr from INR 32.1 Cr reported in the previous year. The company’s total revenue also increased by 59.2% from INR 86.6 Cr in FY18 to INR 127.9 Cr.

Zivame’s CEO Amisha Jain had then noted that the company is on track to break even by December 2020. “With tech, data, and innovation at the heart of everything we do, we are set up for exponential growth over the next few years,” she added.

Though the Covid-19 pandemic and resultant lockdown did dry up its revenues for a bit, the company has registered 60-70% of its pre-Covid footfalls in its retail stores. With this, the share of online commerce has gone up to 90% vs an 80% in pre-Covid times. “Our average order value has jumped compared to pre-lockdown days,” the spokesperson told Inc42 in June 2020.

The news of Reliance Brands acquisition comes after a media report suggested that Reliance Jio may kick start its acquisitions spree in the B2C space with epharmacy Netmeds. The report adds that Reliance Jio may also enter niche markets if needed to win the digital consumer market. Though Reliance Jio and Reliance Brands are different entities, this may serve the same purpose of digital consumer market expansion.