PARIS French investment group Eurazeo (EURA.PA) agreed to invest 285 million euros ($397 million) in Spanish fashion label Desigual to take a 10 percent stake in the company through a capital increase and help it fund its expansion.
The transaction gives the Barcelona-based brand an enterprise value of 2.7 billion euros, Eurazeo said, adding that a stock market listing for the company could follow.
"It's a possible option," Eurazeo Chief Operating Officer Virginie Morgon said in an interview on Tuesday.
She said the group did not plan "in principle" to increase its stake in Desigual, but added: "We don't rule anything out."
Eurazeo made proceeds of around 270 million euros through the mid-December initial public offering in Milan of luxury goose down jacket maker Moncler (MONC.MI), in which it had held a 31.2 percent stake.
Desigual said in January it was accelerating its expansion in Europe and emerging markets, and hoped to achieve 1 billion euros in sales this year, up from 828 million last year. Its core margin was 29 percent in 2013.
Desigual has gained a reputation for bright garments and bold marketing, offering free clothes to shoppers who arrive in their underwear to special sale parties. At the end of 2013, Desigual had 405 stores in 109 countries.
"Eurazeo will support Desigual's strategy, which is to continue its geographic expansion in Europe and consolidate its recent international development," Eurazeo said on Tuesday. "The roll-out of the brand will also include ... new product categories, such as accessories, footwear and household goods."
"The three geographic zones we've identified as the most promising for Desigual over time are the United States, Brazil and Japan," Morgon added.
Desigual was founded in Ibiza in 1984 by Swiss designer Thomas Meyer, until now the company's sole shareholder.
($1 = 0.7188 Euros)