2XU, the Australian-based compression apparel brand, has received backing from L Capital Asia, a private equity fund sponsored by French luxury retail giant LVMH.
L Capital acquired a 40 percent interest in 2XU, a value of about $75 million Australian dollars (U.S. $68mm).
Founded in Melbourne in 2005, 2XU has developed a strong following among triathletes, cyclists, runners. Its line ranges from $60 T-shirts and $800 wet suits. 2XU also supplies training gear to the US military, including the Navy Seals. The company said it’s achieved revenue growth in excess of 40 percent over the last five years. Sales will reach about 65 million Australian dollars (U.S. $59M) this year.
2XU has approximately 30 employees in Melbourne and 30 in its US headquarter, plus retail staff. It has 12 stores in Australia, one in New Zealand and opened its first in the U.S. in April in Santa Monica, CA.
“We believe that its experienced international team will accelerate us towards our goal of becoming Australia’s first major global sportswear brand,” 2XU Executive Chairman, Clyde Davenport in a statement.
The L Capital Asia investment is expected to particularly support expansion into Asia while also supporting expansion overall. Its strongest markets currently are the US, Scandinavia, New Zealand and Europe. 2XU also expects to benefit the experience of LVMH, the Paris company that owns the Christian Dior, Louis Vuitton, Givenchy, Moet Hennessy luxury brands and operates more than 3,000 stores worldwide, including Sephora. In addition, the company sees a strong “cultural fit” with L Capital, whose team includes two ex-Nike executives.
Before joining LVMH in 2007, Managing Partner Ravi Thakran was president of the Nike group, South Asia and southeast Asia. Its Managing Director – Operations Uday Mehra formerly headed Nike India and also ran the Asia Pacific region for Tommy Hilfiger. Past investments by L Capital Asia includes acquiring a stake in Australian outdoor clothing company R.M. Williams.
“2XU signifies a winning proposition of best in class product preferred by pros across varied sports, with design and innovation rooted in Australia, one of the world’s most active countries, coupled with an extremely passionate and driven management team,” said Thakran. “We firmly believe that the combination of this strong proposition, with our unique approach to performance enhancement across our portfolio companies will help the brand in achieving its full potential as a strong, globally recognized performance sportswear brand.”
2XU was founded by Davenport along with triathlete James Hunt and sales and marketing specialist Aidan Clarke. The investment by L Capital investment will cut the trio’s stake in the company to 42 percent from 70 percent. Lazard Australian Private Equity, which invested in 2XU in 2011, will see its stake trimmed to 18 percent from 30 percent.
Director of Lazard Private Equity, Gareth Young, said, “Lazard Private Equity has enjoyed a successful partnership with 2XU since 2011 during which time the business has doubled its turnover, profit and been highly cash generative. This transaction delivers to our Fund 2 investors a money multiple return and IRR in excess of 2x and 50 percent respectively. We selected L Capital Asia as a like-minded and value-adding partner which can strengthen 2XU’s global growth plan.”
