VIGO, Spain — L Capital, a private equity fund sponsored by LVMH, is reportedly in talks to invest in Spanish contemporary brand Bimba & Lola, according to Modaes.es, a Spanish fashion trade website. Founded in 2004 by two nieces of Adolfo Dominguez, founder of the eponymous Spanish fashion label, Bimba & Lola offers high-end detailing at affordable price points and has already built a retail presence in 17 countries, including stores and franchises in the Middle East and Latin America.

If true, this would be the second major investment by L Capital in the contemporary segment in a span of three years. Bimba & Lola's positioning is similar to that of Sandro, Maje and Claudie Pielrot, labels controlled by SMCP, of which L Capital acquired a 51 per cent stake in 2010. After growing SMCP's business to annual revenues of 350 million euros, last October, L Capital announced that it would sell its stake in SMCP and, over the weekend, Reuters reported that private equity firm KKR is a likely buyer.

As reported on BoF, in recent years, contemporary European brands have risen in importance based on a successful strategy that fuses the image and marketing tactics of luxury brands with the responsive, low-cost manufacturing methods employed by fast-fashion companies.

Bimba & Lola currently generates more than three quarters of its business in Spain and has been seeking an investment partner to strengthen its international business. If it came to fruition, the deal would allow the company to press ahead with further international expansion plans into Asia, Brazil and Eastern Europe.

For 2012, Bimba & Lola reported sales of 70 million euros. The brand, which already has a store at London's Westfield shopping centre, is set to open another London location in Notting Hill, where several other European contemporary brands already have a concentrated retail presence.

Disclosure: LVMH is part of a consortium of investors which has a minority stake in The Business of Fashion.