Trent, the flagship retail arm of Tatas, is in talks with Spanish retailer Inditex group to bring another fashion brand, Massimo Dutti, to India, according to a person close to the development.
However, it is not known whether both parties would enter a joint venture (JV) or go for a franchise agreement. Trent has a JV with Inditex for Zara, wherein the Spanish company owns 51 per cent. The JV runs five stores in India.
If the talks succeed, Trent may set up a couple of stores in metros in the initial years, said the source on condition of anonymity. Massimo Dutti has 542 stores in 50 countries and offers a variety of collections, from high-end fashion to easy-going casual wear.
None of the companies replied to emails on the subject. In a recent interaction, Trent management did mention expanding the scope of its alliance with the marquee Spanish brand house. “We are exploring the possibility of bringing another retail format of the Inditex group to India,” Trent Vice-Chairman Noel N Tata had told Business Standard recently.
The Inditex group, which clocked revenues of ¤12.53 billion (Rs 80,192 crore) in 2010, is made up of more than 100 companies, operating in textile, design, manufacturing and distribution. The group runs over 5,000 stores in 78 countries.
It is one of the world’s largest fashion retailers, which operates different formats such as Zara, Pull & Bear, Massimo Dutti, Bershka, Oysho, Stradivarius, Oysho, Zara Home and Uterque.
Retail consultants say it is logical to bring in more brands from the same partner.
“It is a logical thing to do. If anyone has a joint venture with a particular group, it makes sense to build a portfolio of brands. If you bring in more brands, you can spread your costs. Then cost per brand will be lower and you can reduce risks associated with it,” said Devangshu Dutta, chief executive, Third Eyesight, a retail consultancy.
According to retail consultants, Zara has been a huge hit in India since its launch in May-June last year. Industry sources say Zara stores in Select City Walk and DLF Promenade in Delhi are clocking revenues of Rs 5-6 crore and Rs 4 crore, respectively, per month.
Trent’s plans to open Benetton’s Sisley stores, with which it has a franchise agreement, have not worked out as planned, as it had difficulties in matching Sisley supply chain to customer demand.
Source : Business Standard