The Qatari royal family is said to be in the lead to acquire Spanish fashion brand Pepe Jeans, said several sources familiar with the matter.

The clothing retailer has set a high bar by setting a price of around EUR700m, and is expecting binding offers in around three weeks.

Royal family is the only bidder willing to pay such a high price, as per sources. Pepe’s advisor Morgan Stanley received indicative offers in October from a series of financial investors including Permira, KKR, PAI, and Cinven.

It is learnt that the royal family is making its bid through Mayhoola for Investments SPC, an investment vehicle with close ties to Sheikha Mozah, the second wife of the former emir.

Pepe is known for its high-end denim and casual wear collections. Majorly held by private equity firms Torreal, Arta Capital and L Capital, the brand is contemplating sale as traditional investors find Pepe expensive.

Entire luxury goods industry is seeing a downturn as consumers increasingly switch to affordable brands amid economic weakness in Europe and slowdown in some international markets including China and Russia.

Pepe was launched in London and became an established brand by 90s. It is now present in 60 countries and sells its products through more than 7,000 multi-brand stores.