India-based fashion retail chain Future Lifestyle Fashions (FLFL) has entered a conditional agreement to acquire a 29.9% stake in e-commerce fashion business Koovs.

As part of the deal, which is subject to satisfaction of certain conditions, Future Fashions will purchase a 24.8% stake for £5.78m at a price of 10p per share.

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Koovs is also planning to raise up to £10m of equity at a price of 15p per share, which is conditional upon shareholder approval.

As part of the deal, Koovs chairman Lord Alli will invest £1.5m in the equity raise while FLFL has agreed to make additional investments to increase its ownership to 29.9% within six months of completion of the raise.

“This investment would complement the existing value chain for FLFL as an integrated branded fashion player.”

Future Group managing director and group CEO Kishore Biyani said: “In FLFL, we have successfully created, grown and invested in leading Indian fashion brands and are excited to partner with Koovs to continue building on FLFL’s ambition.

“This investment would complement the existing value chain for FLFL as an integrated branded fashion player. FLFL’s strong retail presence backed by owned brands coupled with Koovs online strategy will help reach more customers and create value for all stakeholders.”

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Both the companies will submit the application for admission of the subscription shares to trade on the AIM market of the London Stock Exchange, following receipt of the subscription sum.

The agreement will also see two representatives of FLFL join the Koovs board in due course.

FLFL owns and markets around 30 fashion brands through its outlets, department stores, multi-brand outlets and company-operated chains such as Central and Brand Factory. It currently operates more than 400 stores.