Kishore Biyani-controlled Future Lifestyle Fashions said it has hived off its leading brand Lee Cooper into a new step-down subsidiary, Future Specialty Retail.

The company would also be issuing Rs 250 crore of compulsorily convertible preferential shares to the new fully-owned arm.

This fund infusion will result in the promoters diluting 26 per cent of the brand value of Lee Cooper, which is pegged at Rs 1,000 crore, market sources told.

The company in a BSE filing said it’s another wholly-owned subsidiary, Future Trendz, will carry on fashion retail business and related activities.

Future Specialty Retail was incorporated on September 27, with a subscription amount of Rs 5 lakh, according to the exchange filing.

Future Lifestyle Fashions runs Central, Brand Factory and several other brands including Indigo Nation, Lee Cooper, Sculler, and Clarks.

It had divested its stake in Biba, AND and Celio over the past few years, but still owns significant shares in brands such as Clarks, Tresmode and Giovani, among others.

Last year, Future Group Chief Executive Kishore Biyani had said the company would target revenue of Rs 75,000 crore to Rs 1 trillion, from the current Rs 20,000 crore. It is focusing on food, fashion, general merchandise and home categories.

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