Footwear maker Skechers USA Inc and Italian cosmetic brand Kiko have got an approval from the Government (under FDI) to open single brand outlet in India.
On a similar note, the Department of Industrial Policy and Promotion (DIPP) has received proposals from global brands like Ryohin Keikaku, Nike, Adidas and Swarovski. They will soon plunge in the single brand retail sector, following a relaxation in the foreign direct investment rules in July.
DIPP will now look through all the applications and will put them before the Department of Economic Affairs and wait for an approval. India permits up to 49 per cent of FDI in a single brand retailing under the automatic system. For higher levels, an approval is mandatory. Companies should adhere to a 30 per cent domestic sourcing norm for the investments which exceed 51per cent.
Skechers and Kiko’s approval have come nine months after they had filed the applications. Henceforth, they will be able to trade online only after opening their brick-and-mortar stores. Italian luxury apparel company Grotto, owner of Gas Jeans is also going through the formality procedure with DIPP as it has been referred back by the economic affairs department for clarifications.
The Government, in November relaxed FDI rules for single-brand retailing and permitted companies to trade through wholesale, retail and ecommerce channels. FDI inflows in India has grown at 37 per cent, which accounts for $39.32 billion in 2015. For 2015-16 till January, 424 FDI proposals are queued up with DIPP, of which 285 worth Rs 48,000 crore have been signed off.
Skechers and Kiko – The Inception and expansion
Headquartered in Manhattan Beach, Skechers was founded in 1992 by Robert Greenberg and his son Michael. Today a global leader, Skechers USA, Inc. is a three billion dollar company dealing in high performance and lifestyle footwear industry. It designs, develops and markets more than 3,000 styles for men, women and children.
Beyond the United States, Skechers product is available in more than 160 countries and territories through an international network of subsidiaries in Canada, Brazil, Chile, Japan, and 27 countries in Western and Central Eastern Europe, as well as through joint ventures in Asia and distributors around the world.
Kiko or Kiko Milano was founded by footballer Antonio Percassi in 1997. It was later concretely implemented by his son Stefano. Since 1997, kikocosmetics runs an website and sells leading Italian professional cosmetics brand.
KIKO exports to countries like Albania, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and United States of America.
Skechers has two distinct footwear categories: a lifestyle division and performance footwear. Through licensing agreements, the company also offers branded apparel, bags, eyewear, toys, and more. Skechers sells its footwear in department, specialty and independent stores, as well as through more than 1340 company owned retail stores and online at skechers.com.
Kiko has the largest and most diverse selection of beauty products, makeup, cosmetics and skin care products in the world. Safe and effective, they are of the highest quality, created to satisfy the beauty requirements of women of any age. Kikocosmetics.com sells a huge range of ‘Made in Italy’ cosmetic products online.
The India Story
Skechers, entered India in 2012, and were importing their products in the country. Since 2015, the company was planning to start a local manufacturing unit to serve both domestic and export markets. After nine months of tussle with the Government, they have got a permission to open single brand outlet in India.
Kiko joined hands with real estate major DLF’s fashion retail arm at 51:49 JV. The company had announced an investment of Rs 60 – 70 crore to set up 50 stores of 700 – 1000 sq ft approx in the next five years. Along with Skechers, Kiko also got permission to sell its products in India.