Worlds Finest Luxury Retail Brands Lined Up For India, In Anticipation Of Relaxed FDI Norms.

The coming months could see a slew of high-end global fashion brands entering the $4.6 billion (around R20,700 crore) Indian luxury market, through partnerships with domestic retailers like Reliance Brands, DLF Retail Brands and others.

According to industry sources, Italian luxury apparel player Emilo Pucci, designer handbag manufacturer Krizia (also from Italy) and American high street casual wear brand Brooks Brothers are likely to set up operations in India soon. They’re in talks with DLF and Reliance for inking joint-venture partnerships.

International brands are riding high on hopes of relaxed foreign direct investment (FDI) norms that could see a nod for increased foreign capital in single-brand retail and opening up of FDI in multi-brand retail.

Sources indicate that American luxury department store Bloomingdale’s, specialty store Neiman-Marcus and haute coutre brand Saks, will also enter the Indian luxury market that is growing at 15-17 per cent and is tipped to touch $14.7 billion by 2015.

DLF Retail and Reliance Brands have been most aggressive in tying up with upscale foreign brands, observe experts. Sharad Mehra, SVP, fashion & apparel, Technopak Advisors said, “DLF, with its abundant and upscale retail space, offers a great proposition to the prospective brand and Reliance has the scale and capital to grow these brands.”

Reliance Brands, which has a tie-up with high-end players like Diesel, Timberland, Paul & Shark, Quiksilver and Steve Madden, intends to rope in more international brands. Darshan Mehta, president & CEO, Reliance Brands said, “There are many fashion brands in the pipeline, both in menswear and womenswear.” However, he refused to name them owing to a non-disclosure agreement. Sources add that LVMH's Sephora, prominent beauty retailer and high-end women’s clothing brand Bon Chic Bon Genre (BCBG) from France are in talks with the company. Whether the partnership will be a JV or a license agreement couldn’t be confirmed.

Sources indicate that Swedish fashion retailer Hennes & Mauritz (H&M) is planning an India foray and has held talks with DLF Brands among others. However, an emailed questionnaire to DLF didn't elicit any response. The company, which has a franchise agreement with Italian high street fashion brand Alcott since 2008, is likely to convert that into a JV. DLF also has a collaboration with menswear brand Boggi Milano, that holds a 30% stake in the company.

Delhi-based Blue Clothing Company which operates a host of luxury brands in the fashion and home décor segments, introduced Turkish brands Damat, ADV and Tween to India earlier this year, and is also in talks with other foreign players.

Despite the heightened activity in the luxury space, retailers believe that high customs duty on goods and the dearth of luxury shopping destinations in India, act as deterrents to the growth. Mehta added, “Foreign brands are keen on entering the market but they're apprehensive about suitable locations. High-end brands refuse to set up stores in crowded streets or ubiquitous malls.”

Source: Financial Express.

Tags: Indian luxury market,luxury retail,Emilo Pucci, Krizia, Brooks Brothers,bloomingdale, neiman marcus,saks,diesel, timberland, paul and shark, quiksilver,steve madden,sephora, bon chic bon genre,

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India Offers Great Business For Luxury Brands Licenses/Franchises. Top International Brands Re-Work India Retail Strategy.

The recent report 'World Investment Prospects Survey 2009-2012' has ranked India second in global foreign direct investments in 2010. Further, it says India will continue to remain among the top five attractive destinations for international investors from 2010-12. And even though the issue of allowing FDI in multi-brand retail is still being debated in the country, nearly a dozen global fashion brands are waiting to open shop here. Some are already in talks with domestic players for distribution arrangements. British clothing brand Jack Wills, Italian Rifle Jeans, American fashion designer Michael Kors are some big names likely to enter India soon, following licensing agreements with local partners.

Indian regulations allow 51 per cent FDI in single brand retail while no foreign investment is allowed in multi-brand retail. However, many fashion brands prefer the licensing route. Under this, the local retail partner invests in branding, marketing and expansion. As Abhay Gupta, Executive Director, Blues Clothing Company who has licenses for many top global brands in India avers, “If a brand enters directly, it would benefit in terms of financial muscle. While a franchisee would have his own limitations, own growth plans, and his own structure. Sometimes there may be a mismatch between the growth pattern presented by a franchisee and the growth pattern demanded by a brand. That’s where the discontent arises.” Gupta should know as Blues Clothing Company retails brands like Cadini, Versace, John Smedley among others.

Abhay says there is no set rule that brands should enter through the franchisee route. There have been both successes and failures of the franchise route and joint ventures. Similarly there have been failures of direct entries with sleeping partners and successes too. “But we have had two methods working for us. One is the franchise and the other is the license route. And we have done well in both. We have five stores per brand. No brand would grow from one to five stores if they were not satisfied with us as a partner. And we would not invest in five stores if we were not satisfied with the brand.” What works is that India contributes to global sales of these brands.

Ashish Dhir, Associate Vice President, Technopak Advisors, agrees there is a huge market for luxury apparels in India. The growth rate of the luxury segment is more than 20 per cent. Luxury brands are entering India. And in Delhi and Mumbai we have enough retail spaces for them.” According to experts, the luxury branded clothes market is pegged at Rs 2,000 crores or 10 per cent of the overall organized branded garments market in India. It is growing at over 30 per cent year-on-year, making India an attractive destination.

And the list of brands now wanting a foothold in Indian market is growing. For example, Jack Wills, a UK-based brand, is following the licensing route and will be available in metros. Rifle Jeans which entered India in 2006 but did not make a mark has been relaunched through a new local partner. As Dipak Agarwal, CFO, DLF Brands points out, “The business of retail fashion brands is worth $3 billion in India, out of which these luxury brands can easily capture half-a-billion dollars in next 3-4 years, provided they put in the right strategy.”

However, many brands already present in India have had to rework their marketing and retail strategy. The buzz is the likes of Calvin Klein, DKNY, and Hugo Boss are on the lookout for new retail arrangements while Gas wants new distributors. Diesel and Italian brand Miss Sixty which switched partners — Diesel switched from Arvind Brands to Reliance Brands while Miss Sixty did the opposite— are again looking around to add more distributors. Ditto for other luxury brands including Mango and DKNY (currently with DLF), and Brioni among others. Agarwal is clear that DLF’s arrangement with DKNY will continue. “They continue to remain with us. Rather, we are aggressively building up stores for them and are looking forward to opening a few soon,” he opined.

Tags:Jack wills, Rifle Jeans, Michael Kors, licensing agreements, Cadini, Versace, John Smedley, Diesel, Calvin Klein, Hugo Boss, DKNY, Miss Sixty, Brioni, retail business, luxury retail in India

Source:fashion united may 25.


This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.We help retail brands franchise and retail businesses expand to various geographies across the globe through our franchise development and franchise recruitment modules.If you are an entrepreneur seeking a international retail franchise we can help you evaluate and start a new franchise.Visit www.sparkleminds.com for more details on how you can either expand your existing business through franchising or start a new business.