Synova invests in handbag business

The UK-focussed buyout group has made its first investment, buying up handbag and accessories group TLG from the Lunan Brothers.

Lower mid-market firm Synova Capital has made an undisclosed investment in The Lunan Group (TLG), owner of “affordable luxury” handbag and accessory brands Fiorelli and Modalu.

The investment, thought to be worth between £15 million ($30 million; €19 million) and £30 million, will allow the group to capitalise on international growth opportunities, particularly in the emerging markets of the BRIC economies.

The deal is Synova’s first investment since the firm was founded in May 2007 by Philip Shapiro, formerly of Phoenix Equity Partners, and David Menton of Tamares Capital. 

TLG acquired Fiorelli in1995 and the brand is now purported to enjoy an estimated 13 percent share of the UK branded handbag market. Modalu, another designer of handbags and accessories, was founded by TLG in 2004.

Following Synova’s investment, Stuart Lunan, who co-founded TLG, will remain with the group as chief executive officer while his brother, David Lunan, will leave the business.  Leo Gestetner, co-founder of Brands etc, will join the group as executive chairman.

Philip Shapiro, managing partner of Synova, cited the firm’s management and growth prospects as drivers for the deal: “We are confident that the combination of our growth capital injection and Stuart Lunan’s strategy will deliver continued success for Fiorelli and Modalu both in the UK and internationally.”

In May this year, Synova recruited Paul Myners, the chairman of Land Securities and one of the City of London’s most famous pluralists, to join the firm’s investment committee.

Synova positions itself as a generalist investor, but with preferences for certain sectors, including consumer, healthcare, leisure and financial services.