Franchise News

LVMH-owned Sephora may dump Genesis Colors, in words with DLF Brands for new franchise business partner in India

Franchise News NEW DELHI: The spat between LVMH-owned private equity firm L Capital Asia and Genesis Colors may lead to Sephora, a beauty products retailer owned by the French luxury goods company, finding itself a new franchise partner in India. Sephora is currently in talks with DLF Brands, according to two people with direct knowledge of the situation.
Singapore-based L Capital Asia asked Genesis Colors to buy back the 40 per cent stake that the PE firm holds in Genesis Luxury, ET reported on September 25.
Sephora is currently sold in India by Genesis. ET had also reported that L Capital asked Genesis Luxury to get its accounts audited by one of the Big Four firms and said that the private equity firm believes that the management of the company is indifferent to its suggestions.
Genesis Luxury, founded by former Citibank executive Sanjay Kapoor, markets several top luxury brands in India such as Jimmy Choo and Armani.
One of the persons cited above said Sephora is expected to sign a deal with DLF in the coming weeks. Dipak Agarwal, chief executive of DLF Brands, and Karishma M Bedi, country manager for Sephora in India, declined to comment. Genesis did not respond to an e-mailed questionnaire sent on Thursday.
Genesis opened the first Sephora store in New Delhi’s Select Citywalk mall last year. Genesis Colors was founded in 2001 and is primarily involved in the marketing of three brands — Satya Paul, Tie Rack, and lingerie brand Bwitch.
In 2008, the company began the marketing and distribution of international luxury brands through its unit Genesis Luxury, which currently has either joint ventures or franchisee deals with Armani, Burberry, Bottega Veneta, Canali, Furla and Michael Kors among others.
The Genesis-L Capital spat is the latest of several such feuds between Indian retailers and PE investors. Last year, PE investors, including TPG Capital and Bain Capital, accused Lilliput Kidswear of financial mismanagement and dragged founder Sanjeev Narula to court.
Earlier this year, Catmoss Retail was accused by its investor SAIF Partners of similar wrongdoing.
In 2009, ICICI Venture asked the Chennai office of the Registrar of Companies to probe Subhiksha Trading Services, alleging operational as well as financial mismanagement at the defunct discount retailer, in which the PE firm held a 23 per cent stake.
Source : economictimes.indiatimes

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