Qatari royal family leads race to buy Pepe Jeans Group for at least €700 mn

The Qatari royal family is leading the race to buy Pepe Jeans Group, the Spanish clothing retailer known for its denim and sportswear brands, for at least €700 million ($873 million), Reuters yesterday reported, citing several sources close to the auction process.

The bid has been tabled by Mayhoola for Investments S.P.C, an investment vehicle of the Qatari royal family, which had also acquired iconic Italian fashion house Valentino Fashion Group SpA in 2012 for $857 million. (See: Qatari royal family buys iconic Italian fashion house Valentino for $857 mn)

Private equity firms including KKR, Permira Advisers, PAI Partners and Cinven have already tabled indicative offers for the Spanish retailer, which also owns British brand Hackett, the report said and added that the highest bid received is around €730 million ($912 million).

Pepe Jeans is 43-per cent owned by private-equity firms Torreal - the investment company of the Spanish entrepreneur Juan Abell, 16 per cent byArta Capital, and 11 per cent by L Capital, and 30 per cent by its management team, led by CEO Carlos Ortega, who will continue to lead the company post acquisition.

Based in Sant Feliu de Llobregat, Spain, Pepe Jeans was started by three brothers Nitin, Arun and Milan Shah  in 1973 at a weekend stall on London's Portobello Road Market and later expanded across Europe in the 1980s.

The group, which uses actor Ashton Kutcher, model Alexa Chung and footballer Cristiano Ronaldo in its campaigns, has 300 owned stores and 6,000 multi-brand and department store clients, is the exclusive distributor of Tommy Hilfiger in Spain.

In 2006 Pepe Jeans acquired Hackett, created by Jeremy Hackett and Ashley Lloyd-Jennings for clothes and accessories.

It is a brand that is associated with the world of polo and it sponsors several teams in England, Spain and France. It has sponsored the England rugby team as well as the London rowing club and the British Navy polo team.

It has an exclusive distribution network with over 10 wholly-owned shops in London, Paris, Madrid and Dublin.

The group is reported to generate annual sales of around €550 million.

The Qataris have recently gone on a shopping spree in Europe, snapping up London's Harrods department store, stakes in German sports car maker Porsche, UK's Barclays Bank, the London Stock Exchange and Royal Dutch Shell among others.