The government’s move to relax norms for foreign retail players to enter India through the equity route has not sounded the deathknell for the earlier practised franchisee/distributor route. Players are still opting for this route and experts feel that it is a tactful and cautious approach.
?Luxury brands, which are always cautious in their approach before entering any market, usually adopt the route of distributors and franchisees since they do not want their investments to get stuck because of strict investment norms. Brands like Burberry, Dior and Ed Hardy have adopted this approach. This is considered a safe way to be in the market in the initial years till the market matures,? said Ankur Bisen, vice-president of retail and consumer products division at Technopak.
In a latest example, Italian apparel and shoe brand Geox Group, which is among the top brands in Italy and a seller of premium and life-style casual footwear products globally, has approached Indian company G&B Footcorp to start distribution of products in India. Calling their absence in the Indian market an unaffordable miss, president and founder of Geox Group Mario Moretti Polegato said that the dynamic market is a major destination while expanding in the Asia-Pacific region.
?We were here earlier in India in 2006, but we wrapped up since the response was not good. Now that the market has matured, we cannot afford to miss out on the Indian market. We have chosen a distributor who is experienced and has an excellent record in the sector,? said Mario Moretti Polegato.
Geox as of now plans to open a total of 25 stores (about 20 stand alone stores) in major India cities in the next three years.
Having tied up with G&B Footcorp (owned by Gurpreet Oberoi) as their exclusive distributor in the country, G&B Footcorp has a legacy of retailing a number of brands in the country. The company started in 1972 as Sarobe Fashions, which opened the first store of the textile brand, Bombay Dyeing, in Delhi. In 1992, G&B opened the first store of the iconic Italian brand: United Colors of Benetton and then expanded. In 2005, the Benetton Group formed a partnership with the company, which eventually led to the formation of G&B.
Today, G&B is responsible for the Indian presence of Sisley and Dell as well. Similarly, the $10-billion Japanese fashion retailer Uniqlo is also understood to be in talks with Arvind to build a $1-billion business in India by the end of the current decade. Uniqlo is a Japanese firm that sells trendy and casual merchandise at competitive prices, with ambitions to become the world’s top fashion retailer toppling Zara and H&M.
Uniqlo is also believed to be in talks with Arvind after evaluating options such as Sunil Mittal’s Bharti Enterprises, Aditya Birla’s Madura Fashion & Lifestyle and Reliance Brands. Arvind Brands & Retail has had long-term ties with Philip Van Heusen (PVH), Tommy Hilfiger and VF Corp, UK retailers Debenhams and Next. Uniqlo garners 45% of its sales from women’s clothing, 35% from menswear and the remaining 20% from kidswear.
