Monday 26 September 2016

Irish-run private-equity firm Synova sells off UK handbag maker to Hong Kong-listed Global Brands

Published 27/03/2016 | 02:30

The Synova Group sold its high fashion handbag-making subsidiary — which includes Nica bags — for a handsome profit
The Synova Group sold its high fashion handbag-making subsidiary — which includes Nica bags — for a handsome profit

Irish-run private-equity company Synova Capital has sold off handbag maker the Lunan Group (TLG), earning a return of three times the invested capital.

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The company, which was co-founded by Irishman David Menton, one of its managing partners, acquired the TLG business in 2008.

TLG owns handbag brands Fiorelli, Modalu and Nica and is a major supplier of fashion accessories in the UK. It has now been sold to the Hong Kong-listed Global Brands Group, which controls the Juicy Couture brand and has licence agreements to make products for companies including Calvin Klein.

"The Fund acquired TLG off-market in July 2008, having approached the company directly following an in-depth review of the market.

"The investment rationale was centred on a plan to develop TLG's online presence through the creation of a new e-commerce platform and a significant opportunity to drive international sales, with a particular focus on Europe and Asia," Synova Capital said in a statement announcing the deal. The precise financial terms of the transaction were not disclosed.

"As a result of this strategy, TLG enjoyed significant growth in its online business and in international markets, gaining TLG a place in the Sunday Times list of fastest-growing UK businesses in terms of international sales. Driven by this success, the company's total revenues grew from £13m pre-investment to over £30m (€38m) at exit, with profits growing almost threefold over the same period," Synova said.

Prior to co-founding Synova, Menton worked at a subsidiary of WPP, the advertising giant run by Martin Sorrell. He focuses mainly on the financial and healthcare sectors, according to a biography on the company's website.

Synova says it has a "sole focus" on "partnering with talented people in fast-growing businesses".

Philip Shapiro, a managing partner of Synova alongside Menton and a director of TLG, said of the deal: "We worked with an exceptional management team to deliver strong growth in TLG's leading brands both in the UK and internationally. The exit is a result of the ambition and hard work of that team and their excellent working relationship with Synova. With market-leading positions in all of their key territories, we wish the team every success in the next stage."

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