The year 2010 is likely to see top premium and luxury brands from the US and Europe make a beeline for India. Among the first of these to enter could be Spanish brand Zara Basics and US men?s casual and sportswear brand IZOD, with likely sales of products to start by June 2010, according to industry sources.
Other brands, including French label Nina Ricci, Carolina Herrera (US), French shoemaker Christian Louboutin and Italy?s Max Mara, among others, are eyeing India and the fast growing fashion market in Asia in a big way. The Indian luxury goods market is currently growing at a compounded annual growth rate of 25%.
Arvind Singhal, chairman, Technopak, said, ?Brands from the western world are eyeing the Indian market for quite some time, mainly for two reasons. First, India has the fastest-growing population of millionaires in the world. Second, brands are starting to focus on new pockets like India where a multitude of cultures, languages, festivals and tastes give it a flamboyant nature. High-end consumer spends are moving upwards in the country.?
He added that top-of-the-line labels like Miu Miu for women?s wear and accessories from Italy, French brand Yves Saint Laurent which makes perfumes, luxury goods and cosmetic items, would want to make inroads into the country. A foreign brand can enter India either by forming a joint venture with a local partner or through a franchisee. According to industry watchers, Zara Basics, whose proposal to set up a JV with the Tata Group subsidiary Trent Ltd with an investment of Rs 23.58 crore has been approved by the Foreign Investment Promotion Board last year, will have a significant presence in India in the first half of 2010. However, Trent declined to comment on the subject. Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega. According to the proposal, Inditex SA will have a 51% stake in the JV, while the remaining 49% would be held by Trent .
The JV would set up stores to conduct the business of single brand retail of all types of garments, footwear, accessories, fragrances and cosmetics products for women, men and children under the brandname Zara and associated sub-brands of Zara Basic like Zara Woman, Trafaluc, Textures Zara and TRF. Mainly, 50% of the products Zara sells are manufactured in Spain, 26% in the rest of Europe, and 24% in Asian and African countries and rest of the world. J Suresh, CEO of Arvind Brands, said, ?We will launch IZOD in the first quarter of financial year 2010-11. We will have the exclusive rights to design, distribute and retail IZOD in India. The IZOD partnership will focus on creating an IZOD flagship stores in India .? He added that its an iconic brand and we expect revenues of Rs 50 crore in the first year of operation once we introduce the brand in the market. This multi-year agreement covers a wide range of categories including sportshirts, T-shirts, casual trousers, shorts, swimwear and active wear. Arvind Brands, a division of Arvind Mills, currently has licensing relationships with many international brands like Arrow, GANT, Cherokee, USPA and has a joint venture with VF Corporation for brands like Lee, Wrangler and Tommy Hilfiger.