2XU gets $75 million boost from LVMH’s L Capital Asia to fuel international growth

Australian sports apparel brand 2XU has received backing from L Capital Asia, a private equity fund sponsored by French luxury retail giant LVMH.

L Capital has acquired a 40% interest in 2XU, a value of about $75 million, according to 2XU co-founder Clyde Davenport.

2XU was launched in Melbourne in 2005 and is run by Davenport, the original founder of the Davenport underwear label, as well as Jaime Hunt and Aidan Clarke.

Lazard Australia Private Equity bought a stake in the business in 2011.

Davenport told SmartCompany this morning that L Capital Asia was one of a number of investors interested in the business in recent years. He says the L Capital Asia opportunity was “compelling” as it presented the right cultural fit.

“Two senior people in the group, Ravi Thakran [managing partner] and Uday Mehra [head of operations] are ex-Nike,” he says.

Davenport says with LVMH behind L Capital Asia, the potential for international growth and product range expansion is huge. LVMH owns iconic brands Christian Dior, Louis Vuitton, Givenchy and Moet Hennessey.

“It gives us the chance to accelerate our growth”, he says.

He says 2XU is aiming to be Australia’s first global sportswear brand, and while he doesn’t expect it to reach the same sales as Nike or Adidas, he says it “could get to $1 billion”.

2XU produces high performance sportswear for men and women with a focus on the technical aspects of a garment. It has 12 Australian retail stores, two recently opened US stores, and wholesale operations in around 50 countries. Davenport says its strongest markets are currently the US, Scandinavia, New Zealand and Europe. However, the L Capital Asia investment should help push the brand into Asia.

It also supplies training gear to the US military, including the Navy Seals.

Davenport says all design is done in Melbourne, with manufacturing in China and Thailand using European fabrics. He says design is vital, as regardless of performance, “if they don’t look good people won’t buy them”.

He says the business has around 30 head office staff in Melbourne and 30 in its US head office, plus retail staff.

Davenport credits Clarke and Hunt for their passion and ability to get the business to thrive, despite tough conditions in the retail sector.

“Jaime is an ex-triathlete…he travels the world looking for the best fabrics.

“Aidan is responsible for the sales and marketing.”

The company reports it has achieved revenue growth in excess of 40% per annum over the past five years.


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