Asian brands with big dreams had better watch out. LVMH is on the lookout for Asian brands that have the potential to go international. The luxury retailer is backing a $650 million private equity fund called the L Capital Asia Fund to focus on Asian labels that have it in them to become global names. So far, the L Capital Asia Fund has invested $90 million in minority stakes in a Hong Kong-based watch and jewelry brand, Emperor Watch and Jewelry, and in two fashion firms from Singapore (including shoe and bag brand Charles and Keith). The fund is currently in talks with a Chinese fashion brand and an Indian firm as well.
However, unlike LVMH, L Capital Asia Fund will not be looking at luxury brands. The idea is to look at brands catering to one tier lower than the luxury sector. Ravi Thakran, managing partner of the fund, predicts that this area will grow fastest because of its greater affordability and reach. The fund is scouting for promising entrepreneurs in the China, India and Southeast Asia region.
The fund will give selected businesses monetary backing. But in addition to that, the companies will get support from LVMH as well. If you are a fledgling businessperson, it hardly gets better than that. The Parisian luxury conglomerate is the parent company of big luxury brands like Louis Vuitton, Dom Perignon and Parfum Christian Dior. In 2010, the company clocked record sales of 20.3 billion euros, largely due to the growing Asian markets.
What is significant, however, is that LVMH’s contributed share in the $650 million fund is less than 10 percent. The remainder comes from American and Asian investors looking to rake in huge profits from the burgeoning Asian markets.