Abu Dhabi based supermarket chain Lulu Group has bought a 10 per cent stake in the UK-based trading firm, The East India Company, and a 40 per cent stake in its fine foods subsidiary for around $85 million in total.
The new investment will enable the fine foods unit to expand its store network in Europe, the Far East and prepare for a launch in the United States, Yousuf Ali MA, managing director of Lulu Group, said in a statement.
“We will support East India Company to develop into a truly global luxury brand and will deliver great results in the coming days. I am sure our alliance will help the Company to expand its business in new regions and markets,” said Yousuf Ali.
“We have great plans for the future and will try our best to bring back the past glory of East India Company in this new era,” he added.
Lulu Group will invest $60 million in the first phase and $25 million in the second phase, the company said.
The East India Company, which was founded in 1600 by the Royal Charter of Queen Elizabeth I and revived in 2010 by its chairman Sanjiv Mehta, sells luxury foods including tea and chocolate. It has four stores in the UK and three in the Middle East. It also distributes through retailers in 16 countries.
The company opened a store in the Avenue at Etihad Towers last month. This is the first store in the UAE and third in the Middle East after Doha and Kuwait. The company has plans to open stores in Dubai and Riyadh in future.
It carries an expertly curated selection of fine teas and coffees, artisan sweet and savoury biscuits, an exquisite chocolate range besides jams and marmalades.
Sanjiv Mehta, Chairman of the East India Company told Gulf News that he is optimistic about the new deal. “Lulu Group is strong in the Middle East. It will help us build business.”
He said that they are planning to open 20 stores in the GCC (Gulf Cooperation Council) in the next four years including seven to eight stores in the UAE. “People in the region understand fine tea and fine chocolates. It is natural for us to open more franchise stores in the region.”
According to Mehta, the company is growing at a fast pace in the UK and they plan to open more stores in the commonwealth group of countries in the coming years.
A spokesperson of the Lulu Group said it’s a strategic decision. “We are investing in a great brand which is well known all over the world. We are planning to expand and open more stores in the Indian subcontinent and the Far East.”
Lulu Group, best known for its chain of supermarkets and hypermarkets, has operations in 31 countries and reported turnover in excess of $5 billion last year.
Starting as a monopolistic trading body in 1600, The East India Company became involved in politics and acted as an agent of British imperialism in India from the early 18th century to the mid-19th century.
The company was revived in August 2010 by Mumbai-born entrepreneur Sanjiv Mehta who opened its flagship fine foods store in the heart of London’s Mayfair. With three years, the company opened two more stores in the UK with a store in Bluewater Mal, Kent and a pop-up store in Covent Gardens, London. It also has presence in France, Netherlands, Australia, South Korea and Japan.
The East India Company has historical links with the Middle East. It played a major role in the development of what were the Trucial States, due to its concern with keeping open vital trade routes from India and beyond to Basra and Kuwait.