[THE INVESTOR] L Catterton, a private equity firm owned by French luxury fashion giant LVMH Group, is mulling investing US$500 billion in Korean apparel maker Cowell Fashion, Seoul Economic Daily reported on May 18.

Citing unnamed industry sources, the report said, the firm plans to purchase redeemable convertible preference shares with a 10 percent premium. 

LVMH has been expanding its investment portfolio in Korea. It has invested in three Korean firms in recent years -- US$80 million in YG Entertainment in 2014; US$50 million in cosmetics firm CLIO in 2016; and US$100 million in Snoopby Optical, the owner of sunglass brand Gentle Monster, earlier this year.

The KOSDAQ-listed Cowell Fashion produces and distributes international sports brands such as Puma, Adidas and Reebok. It recently established a cosmetics joint venture called CFCosmetics with Seoul Leaguer.

The report said the French group is expanding its stake in hallyu related companies whose growth has been boosted by strong sales in Asian markets.

“It is also likely Cowell will turn down the offer considering it has ample funds now. But possible partnership with LVMH would help it build a premium image and develop a new business model,” a source was quoted as saying in the report.

L Catterton did not respond to The Investor’s inquiry.

On the new funding news, shares of Cowell hit a 52-week high in early morning trading. The share closed at 3,850 won (US$3.42), up 2.94 percent from the previous day.

By Park Ga-young (gypark@heraldcorp.com)