The story of a home-based online clothing store that was sold for $3 million and is now back on the market.
The owner, David Farr, was the founder and CEO of online clothing retailer Lululemon Athletica.
He had already founded the clothing brand My Pretty Pony, and the business was struggling to grow.
But the collapse of the stock market in 2012 and the recession had put an end to the company’s growth plans.
After a short period of stagnation, Farr’s company went public in 2013 and had grown to a market capitalisation of around $2.4 billion.
However, the company was unable to keep up with its expanding sales of online merchandise, so it sold the business to a private equity firm.
In July 2014, Fargos acquisition of My Pretty Pink was approved by the SEC and the company posted a net income of $2 million.
By July 2017, the firm had already rebranded the company as Lululeson Athletica, and Fargo had gone public.
The company’s new owners bought the website and had the stores back online, but it was still not profitable.
Farr sold the company to the private equity firms for a record $5 million.
The firm was selling for about $8.5 million, and its market capitalization had risen to $14.3 million.
The new owners of the company were looking for an investment of $1 million.
A month later, Farrows family was contacted by the private investors who were interested in buying the company.
They told the Fargs that they would pay the money in a series of installments.
“They told us they would be making payments on the site for five years, and we would receive payments for 10 years,” Farrow said.
He told me that the investors wanted a 10-year payment, which was quite a high amount for the business, and so he had to negotiate a much smaller payment.
After that, the funds were going into the company and it would grow from there.
Farrows was in touch with Lulululemons’ investor group and they offered to buy the business for $10 million.
Lululiens investment group, led by billionaire entrepreneur and philanthropist James Packer, agreed to buy a controlling interest in the company for $6 million.
Farr told me it was a “very good deal”, because Lululoons business model was different to the current online shopping model.
“If they [the private investors] are going to have the opportunity to invest in Lululaons business, they can do that,” he said.
For the past two years, Lululuons founders had been planning to open a store in India and to do that, they had to start the company in New York.
The plan was to set up the first store in the US.
Lululeons India store opened in January 2017 and had its first customers when it opened in Delhi.
The company now has stores in Mumbai, Bangalore and Delhi, with a plan to open in the next few months in Delhi too.
The business is a direct response to the Indian Prime Minister Narendra Modi’s ‘Make in India’ campaign and he said he was determined to “rebuild” India.
During the campaign, the Prime Minister said that he was committed to investing in Indian businesses and creating more jobs.
There are over 300,000 Indians in India.
India is the largest economy in the world and has an unemployment rate of 6.5%.
In a video message to Indian Prime Minster Narendra Modi on August 14, 2017, Farsalinos CEO said that it was “an opportunity to create jobs and strengthen the economy” and said that Lululumons aim was to create a new retail and ecommerce platform in India which would help create employment.
Lulululesons India website is still active, with about 20 stores across the country, but the company plans to open about 40 new stores in India by the end of this year.
At a press conference on September 12, 2017 to unveil the new stores, Faisal told the media that the new online store would be called Lululus, a nod to the word Lul-lul, which means “light” in Hindi.
There is no official name yet for the new store, but Farrow told me the store name would be Lulol.
A new LuluShop website is being launched on September 13.
Farrow told us that the company is currently looking to open more stores in the near future.
More to come.