MUMBAI, 28 December 2010, MINT (A partner to the Wall Street Journal)
The Bindra family, the owners of Biba Apparels Pvt. Ltd, which owns a popular women’s ethnic wear brand of the same name, is on the verge of splitting, said a person directly involved in the development, who did not want to be identified till the details are made public.
Sanjay Bindra, 45, will sell his stake for around Rs 75 crore in an all-cash deal, added this person.
Siddharth Bindra, 36, confirmed that Sanjay Bindra was exiting the business and added that he would be buying his brother out. He declined to speak about the specifics till the transaction is complete.
The Kishore Biyani-promoted Future Ventures India Ltd owns an 18% stake in Biba that it acquired in 2006 for an undisclosed amount. The Bindras own the rest of the privately-held firm. The individual stakes of Sanjay and Siddharth aren’t known; privately-held firms do not have to disclose their shareholding pattern.
Biba, founded 22 years ago by the brothers’ mother Meena Bindra, ended the year to March with revenue of Rs 180 crore and, according to the person cited in the first instance, will end the year to March with revenue of around Rs 200 crore.
Meena Bindra started the business in 1988 with a bank loan of Rs 8,000, selling ethnic wear from home. Sanjay joined the family business in 1994 and Siddharath, in 2002; soon after the firm started film merchandising, creating special clothing lines for Bollywood films.
Biba’s clothing is available in 100 retail outlets across 25 cities, according to its website.
Sanjay Bindra is still on the board of Biba Apparels but he has already started work on his new company, which is likely to sell ethnic-wear apparel under the brand “7 East”, the person cited in the first instance said.
“The company will be launched by mid-March with 18 stores and 60 shop-in-shop stores. The 7 East brand will look at tie-ups with designers such as Manish Malhotra, known to style Bollywood celebrities, and other international designers,” he added.
In 2009, the market for domestic apparel was worth Rs 1.54 trillion and is expected to reach Rs 4.7 trillion by 2020, according to India Textile and Apparel Compendium 2010 published by Technopak Advisors, a retail consulting firm.
It is a highly fragmented market with few significant brands such as Biba, Ritu Kumar and private labels from retailers such as Trent Ltd’s Westside and Future Group’s Pantaloons.
The organized apparel market is expected to grow from 14% at the end of 2009 to 40% by end of 2020, said the report.
Unlike the Western market, customer preferences for Indian ethnic wear vary across the length and breadth of the country, making it difficult for brands to establish themselves nationally, said Devangshu Dutta, founder of retail consulting firm Third Eyesight, explaining why very few brands have succeeded.