?Single-brand? definition to be reworked to let sub-brands in

The Department of Industrial Policy and Promotion (DIPP) has decided to allow single-brand retailers to also sell their sub-brands in India, a development which would come as a big relief for retailers like Marks & Spencer, Zara and Diesel.

The DIPP would rework the definition of ‘single brand’ to enable such retailers to continue selling their sub-brands and stay within the ambit of foreign direct investment regulations in single-brand retailing. ?In India, there is no legal definition for sub-brands,? a senior DIPP official told FE. ?We have checked and sought legal opinion, but we cannot legally define sub-brands. The option in this case is to rework the definition of single-brand, wherein the mother-brand name needs to be present in the prefix or suffix of the sub-brand”.

The problem relating to single-brand retailers selling their sub-brands in India emerged after the finance ministry wrote to the DIPP recently to check whether Marks & Spencers’ practice of selling sub-brands was within the conformity of the foreign direct investment policy on single-brand retail.

?This is a dilemma which we need to sort out quickly,? said the official quoted above. ?It’s not just M&S. Massimo Dutti sells products for men and women under the brand names, Massimo Dutti Man and Massimo Dutti Woman. Similarly, Zara also does the same with the men, women and kids clothing range. All these are different registered and trademarked brands”.

Asked whether such retailers could be asked to re-apply for permission to operate in India under the multi-brand regulations, the official said they wouldn’t need to do so and the only other option is for DIPP to rework the single-brand definition.

Currently, ‘single-brand’ product-retail trading covers only products which are branded during manufacturing and have been selling under the same brand internationally.

Spanish clothing company Inditex sells the Zara brand in partnership with Tata Group’s Trent in India. However, Zara’s products are branded as Zara Man, Zara Woman and TRF, the more causal line of clothing. Similarly, Inditex-owned Massimo Dutti also got approval to sell in India earlier this year. Massimo Dutti also has different brands of products for men and women, although both brands include the mother-brand’s name in the prefix.

UK-based Marks & Spencer offers most of its sub-brands, such as Limited Collection, Autograph, Collezione, North Coast, Blue Harbour, Savile Row Inspired, Indigo Collection and Per Una, in its stores across the country. Italian clothing brand Diesel also sells its sub-brand 55DSL in its shops across the country.

While these single-brand retailers have been selling their sub-brands for the last 2-3 years in the country, the issue of conformity with the FDI regulations was raised by the finance ministry only last month. M&S, the retailer in question, has not yet been pulled up by the DIPP.