Reliance Retail will buy UK-based Superdry's licenses and brand assets in three Asian countries for 40 million pounds, expanding its tie-ups with foreign brands and giving the struggling UK fashion retailer much-needed funds.
Superdry's shares jumped 18% to a near two-month high after the company said it would use the expected 28.3 million pounds net proceeds to boost its liquidity and fund its capital needs as part of a turnaround plan.
The deal will be via a joint venture - in which Superdry will invest 9.6 million pounds for a 24% stake - and cover Sri Lanka, Bangladesh and India, where the UK company has been present since 2012 when it first partnered with Reliance Retail. Reliance Retail has more than 18,000 stores selling everything from groceries to electronics. It also has partnerships with foreign brands such as Jimmy Choo, Marks & Spencer and Pret A Manger.
The company, which competes with Amazon and Walmart's Flipkart, is in talks with investors including the sovereign wealth funds of Singapore, Abu Dhabi and Saudi Arabia for investments of around $1.5 billion, reports said.