Superdry plc has signed an intellectual property joint venture agreement with Reliance Brands Holding UK to accelerate growth in India.
The company has also agreed to sell the intellectual property assets for the Superdry brand and related trademarks in India, Sri Lanka and Bangladesh to the new joint venture for £40m.
Superdry shares surged 30% on the news in early trade on Wednesday.
The deal represents a value not too different to Superdry’s market cap as of the close yesterday and will have a material impact on the company’s cash position.
RBUK, which is owned by Reliance Retail Ventures Limited through its subsidiary Reliance Brands Limited (RBL), will hold a 76% stake in the joint venture. Superdry will retain a 24% share. RBL has been Superdry’s exclusive franchise partner in India since 2012.
After the deal, RBL will continue managing brand operations in the three countries.
RBL oversees a retail empire of over 18,000 stores across India. It offers 50 luxury fashion brands and has a presence in 7,000 towns and cities. The total shopping area covers more than 65 million square feet.
Since partnering with RBL in 2012, Superdry has expanded rapidly across India. With the country’s growing economy and rising middle class, the brand has significant potential. As India’s leading fashion retailer, RBUK is best placed to maximise this opportunity through majority IP ownership.
The deal involves permanently transferring all of Superdry’s brand assets in the three countries to the new joint venture entity. Superdry will invest £9.6 million in the JV using funds from the £40 million IP sale price.
