Fabindia invites PE funds

Monday, 05 September 2011

Fabindia has invited bids from private equity funds for investment in the company. It is also buying out the eight per cent stake held by Wolfensohn Capital Partners. Fabindia wants to raise Rs 200 crores from the deals. The proceeds will be used to fund domestic expansion since the company plans to open around 300 small-format stores in Tier-III cities such as Karnal, Vellore, Rishikesh and Rudrapur. Wolfensohn which acquired stake in Fabindia for nearly Rs 50 crores in 2007 is looking to exit the company. Wolfensohn Capital Partners is a private equity firm founded by former World Bank president James Wolfensohn.

Over the last few years, Fabindia has grown into one of India’s leading ethnic wear brands with over 140 outlets selling men's and women's garments, household furnishings, pottery, organic food and handicraft. Early this year, Fabindia empowered its nearly 700 employees by giving them a stake in the company. The company posted a net profit of Rs 40 crores on a standalone revenue of Rs 420 crores in 2010-11.

Founded in 1960 by a young American, John Bissell, to market the diverse craft traditions of India, Fabindia started as a company exporting home furnishings. Fifteen years later, the first Fabindia retail store was opened in Greater Kailash, New Delhi, with a range of upholstery fabrics, durries, and home linens. Retail was a small part of Fabindia's business until the mid to late 1990s, when William Bissell took over the company from his father John Bissell. William later transformed the company from an export house into a national retail brand.