Warc Blog

Fashion brands target India

1 May 2013
MUMBAI: H&M, Promod, Fossil and Pavers are just some of the foreign fashion chains seeking to set up single-brand retail ventures in India following the relaxation of investment rules last year.

Proposals worth an estimated Rs855 crore in investment have been approved by the authorities, according to Livemint, including a Rs700 investment by sports retailer Decathalon. And more funds are in the pipeline from fashion and non-fashion outlets.

Furniture specialist Ikea is awaiting a decision on a planned investment of Rs10,500 crore, while H&M recently announced it was seeking permission for an investment of Rs700 crore to open 50 stores.

"The single-brand retail is gaining a lot of traction and the investments are only set to increase and this is without even considering Ikea's investment," Abheek Singhi, a partner at Boston Consulting Group India, told Livemint.

The runaway success of fast-fashion chain Zara, in partnership with Tata, had been instrumental in attracting more foreign brands, said Pushpa Bector, senior vice president at real estate agency DLF.

"We expect at least ten new brands and three to four big brands who can take up anchor, mini-anchor positions to come in to India in 2013, 2014," he stated.

Others observers were more wary, noting that while the intent was evident, there had so far been little movement on the ground.

Shubhranshu Panu, retail managing director of the real estate firm Jones Lang LaSalle, suggested single-brand retailers were being "slow and cautious", adding that he was "not seeing much space booking taking place".

Govind Shrikhande, managing director of online fashion retailer Shoppers Stop, added: "For every five new brands that enter the country, there are one or two exits as the retail environment continues to remain tough."

The challenge of finding suitable sites also means it may be some time before the full impact of these investments is realised.

Retailers will thus have to commit to the long-haul, with Darshan Mehta, chief executive officer of Reliance Brands, suggesting "the payoff will happen in the next ten years".


Data sourced from Livemint, Wall street Journal; additional content by Warc staff

 
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