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Global fashion brands eye pacts with retailers for entry into India

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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

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