The government, which had given single-brand retailers an in-principle approval to sell sub-brands, has now come up with clear guidelines on how the companies doing so can go about it. Companies such as Marks and Spencer (M&S), which has sub-brands like Autograph, Blue Harbour, North Coast and Indigo Collection, can sell these in India if they mention both the sub-brand and the parent on the logo of the apparel. At present, either of the two can be seen on the logo.
This relaxation is significant as the company came under the government’s scanner for a possible violation of the foreign direct investment (FDI) policy in single-brand retail, which barred companies from selling multiple brands from one store. Marks & Spencer India is a 51:49 joint venture between the British retailer and Mukesh Ambani-led Reliance Retail, and it has more than 30 stores in the country.
In fact, the finance ministry had raised the matter with the department of industrial policy and promotion (DIPP) and sought to know whether M&S? practice of selling sub-brands was in conformity with the FDI policy, or if the company should apply for a licence in the multi-brand retail sector.
?Though there is no legal term as a sub-brand, M&S can sell these brands as long as the brand name appears in the logo and the trademark,? said a DIPP official.
The government notified the revised FDI policy for single-brand retail two weeks ago. It says 100% FDI is permitted in the sector and foreign investors can now invest up to 49% via the automatic route. However, additional products sold under the single brand will need fresh approval from the government.
