Raymond in talks with KKR, Blackstone to sell a 20% stake in its branded apparel business

Gautam Singhania run Raymond Ltd is in talks with US private equity firms KKR & Co and Blackstone to sell a 20-per cent stake in its branded apparel business to fund expansion, The Economic Times today reported, citing people familiar with the matter.

Raymond has appointed Citibank as investment banker for the deal, the report said.

A sale of a minority stake will help Raymond expand the apparel business, which faces competition from rival Aditya Birla Group's Madura Fashion and Arvind Lifestyle, the report added.

Raymond Group is one of India's largest branded fabric and fashion retailers. It is one of the leading, integrated producers of suiting fabric in the world, with a capacity of 31 million meters of wool and wool-blended fabrics.

The Group owns apparel brands like Raymond, Raymond (Ready-To-Wear), Park Avenue, ColorPlus, Parx, Makers and Notting Hill.

All the brands are retailed through 'The Raymond Shop', one of the largest networks of retail shops spread across in over 200 cities in India and overseas.

Although being among the oldest apparel brands in India, Raymond's apparel business lost its way in the early 2000s when Arvind and Aditya Birla's Madura line of apparel took a huge chunk of market share.

The branded garments segment is expected to have 48 per cent share of overall readymade garments segment in 2019 in India, up from 35 per cent in 2014, the ET said, citing a report released by Edelweiss Broking last year.

Raymond's apparel business has 1,000 exclusive brand outlets of which 800 are franchised. It plans to open another 100 stores across its brands.

As part of restructuring, it has shut down 50-60 loss making company-owned and franchised stores in the past two years and today 90 per cent of company's stores are profitable.