Khadijah Shah is credited with some outstanding collections, setting trends in motion, shaking up the high street and helming some beautiful fashion shoots. Apart from having Sapphire and Zaha as shining feathers in her hat, Shah is well-versed in the art of building brands that soar high. And Elan, her brainchild founded in 2004 is a prime example that made waves with a strong customer base. In her 17 years-long career Khadijah has faced her share of ups and downs. Earlier this year, Elan came under fire when several models and former employees called out the brand due to nonpayment. And now, a big part of it is up for sale.
Industry Insiders Make Big Revelations
According to reliable sources of the fashion industry, half of Élan’s ownership is being sold off for Rs 800 million to Sefam, a manufacturer and retailer of fabrics that owns well-known brands such as Bareeze. Rs 700 million in debt that the company is saddled with is one of the main reasons for this development. Those close to the negotiation have claimed that Élan started facing serious cash flow issues because of a lavish, high-rolling company culture coupled with an overly ambitious growth strategy. Things got worse when Élan went to informal and expensive financing sources, and despite its collections regularly being critically and commercially successful, the brand kept bleeding money. Shah will be paid Rs 100 million in cash to hand over half of the equity and full management control in her brand to Sefam.
Khadijah Shah Responds
In an exclusive conversation with Profit, Khadijah Shah responded vaguely. “Nobody will invest in Élan at a depressed price. They will invest in it, or any brand for that matter, at exactly what its deserved valuation would be. Having said that, I want to clearly state that Élan is now at a stage in its growth trajectory where we are now open to considering the external injection of finances to help us grow rapidly.” She added, “We can’t confirm or deny any news or any figures relating to Sefam partnering with us. If and when we do partner with someone, we will announce it officially ourselves.”
Will Sefam Carry Elan’s Legacy Forward
The question arises that will Seema Aziz and her sons who at are currently managing Sefam will run Elan simultaneously? How they deal with and manage their portfolio will give a clear picture whether or not Élan’s brand presence will increase.
Quote Source: Profit