L Capital Asia, a private equity fund sponsored by luxury goods conglomerate LVMH, made an undisclosed investment in China-based Xinhe Fashion last month (although L Capital’s website dates it in October), according to China-based newspaper China Daily, making LVMH Xinhe’s second largest shareholder.
The investment is L Capital Asia’s first on mainland China, its portfolio otherwise consisting of businesses based in Hong Kong, Singapore and India. The fund closed at $635m in December 2010 and has an investment policy focusing on aspirational brands in the Asian market.
Xinhe, which made $443m in revenue last year, according to its general manager Luo Yonghui, is based in the mid to high-end women’s fashion market and boasts 600 franchised outlets across China. Xinhe’s clothing output is spread across six brands, each targeting a different demographic.
Luo was quoted as saying: “As the purchasing power of Chinese consumers is growing for high-end garments and luxuries, the collaboration with LVMH, the world’s largest luxury goods group, is mutually beneficial.”