Written by Sananda Sahoo for The National
Abu Dhabi’s Lulu Group has made its first foray into luxury retail after acquiring a stake in the UK-based East India Company.
The investment will help to fund the opening of as many as 15 stores across the Middle East and Asia.
Abu Dhabi’s retail major this week signed a deal with the trading firm for a 10 per cent stake in the company and a 40 per cent stake in its fine foods subsidiary for US$82 million.
With the investment the East India Fine Foods Company is expected to expand its store network in Europe and the Far East, and enter the United States, according to Yusuff Ali, the managing director of Lulu Group.
“We will support East India Company to develop into a truly global luxury brand,” he said.
Mr Ali has made an initial investment of $60m and will invest a further $25m in the second phase.
The company did not elaborate on what that phase would involve.
The East India Company’s fine foods unit in July entered the UAE market with a store at The Avenue at Etihad Towers in Abu Dhabi with its local partner, BinHendi Enterprises. This was its third country in the Middle East after Kuwait and Qatar. It has 41 stores across 18 countries, including its flagship at London’s Mayfair, and also sells online.
Lulu Group will look to leverage the brand equity associated with the East India Company (EIC) nameplate, said a Lulu spokesman.
The Indian businessman Sanjiv Mehta, now the EIC chairman, bought rights to the East India Company from its various shareholders in 2005 and relaunched it in 2010. The Indian car manufacturer Mahindra Group invested an undisclosed sum in the firm in 2011.
The UK company at that time had said it planned $100m investment over the next five years and wanted to enter the furniture and home decor, publishing, jewellery and real estate sectors.