Foreign Direct Investment in Multi Brand Retail

The government is thinking of granting 51% FDI in multi-brand retail.

Under the existing rules, upto 51% foreign investment is permitted in single brand product.

FDI upto 100% is allowed in wholesale cash-and-carry trade.

However, the permission will come with stiff riders such as the retail store should be located in cities with a min. population of one million. There are also rules for minimum capitalisation and minimum built up area. Also there are rules to encourage procurement from local manufacturers.

India has 15 million retail outlets. Only 4% of the outlets are bigger than 500 sq feet and the remaining 96 per cent are in unorganised sector.

Weekender- Primus Retail

Weekender

1. Casual Brand Retailer.

2. Average Selling Price: 800 Rs.

3. Repositioned from "Wear Your Attitude" -centring young people to a Family store.

4. Parent Company: Primus Retail

5. CEO: Balaji Bhat.

6. History: The brand was taken over from Jagdish Hinduja's family owned Gokaldas Images in 2007 by Primus Retail.

7. Operates through Franchisee Model.

8.Average Store Size: 600-800 sq. ft store

9. Primus Retail has a licensee agreement with Disney Kids clothing.

10. It is also a franchisee for International apparel brands like Levis, Adidas, Nike, Tommy Hilfiger and Puma.

11. Total Number of outlets: 240 stores

12. Total retail space: 400,000 sqft.

13. Number of Indian cities having retail presence: 150

Tatas to Foray into Footwear Retailing

Tata Group:

1. $70.8 Billion group

2. Alreay has two retail ventures: Chroma and Trent ( Which has Westside, Star Bazaar and Landmark)

3. Tata International: Planning to set up a retail chain for footwear. with their first Store in Delhi

5. The company is already supplying shoes and leather products to Marks and Spenser, Zara, Betty Barclay, Mango, Hush Puppies and Escada.



6. In India it is supplying to Westside, Shoppers Stop and Raymond.

7. It has one of the largest Tanneries in the world in Dewas, MP. It also has a manufacturing unit in Chennai.

8. Chroma : under infinity Retail : Hope to grow into a 100 store brand.

9. Star Bazaar: Hyper market format: Technical expertise from Tesco of UK: Plan to scale up to 18 storres by 2011.



10. Westside: A department store. Signed up with Inditex and promotes stores that will exclusively sell the Zara brand in India.

11. Trent: Headed by Noel Tata

12. Chroma: Headed by R.K. Krishna Kumar.


13. Tata International: Chairman: B. Muthuraman, Executive Director: K. Kaul

Madura Garments- Time for Head Shuffling

Aditya Birla Nuvo's Textile and Apparel Business

Revenue: 1115 crore

It is India's largest player in branded Clothing

Alok Malik: President of Peter England Fashions & Retail Ltd is moving to Idea Cellular. Previously he was associated with Reliance Retail.

The current president of Madura Garments LIfestyle & Retail Ltd, Ashish Dikshit, will be looking after Peter England Fasions & Retail as well.

The erstwhile monolith Madura Garments was split  into Madura Garments Lifestyle & Retail, Peter England Fashions & Retail and Madura Garments Exports Ltd in three years ago.

Birla's planned to invest 400-crore into Peter England Fashions & Retail which was identified as a growth vehicle. Alongside 'More' Peter England was planned into a chain of family stores called "people".

Thus Madura Garments Lifestyle & Retail was planned to play in premium segment and Peter England Fashions & Retail in mid-price segment.

The recession period forced the group to axe the family store concept.

Pranab Barua is asked to spearhead the garments and apparel business. Dikshit will report to Barua.

Madura Garments Exports Ltd, a contract garment producer catering to export markets will have a new business head by the name of ES Shankar.

Aditya Birla acquired Madura Garments from Coats Plc for Rs. 236 crore in 1999.

You can have more information on Madura Brands here. To meet the management team, click here.

Arvind Brands Shakes Hands with Sixty Group

The Deal is to bring menswear label Energie into the country


Sixty Group 

Origin: Italy

Product: Denim

Age: 20 years old brand

Brands under Sixty Group: Miss Sixty, Killah and Murthy&Nye, Energie, Richlue and Baracuta

Arvind Brands

1. Headed by Sanjay Lalbhai

2. Joint Venture with VF Group: Controls the rights of Lee and Wrangler in Indian Market.

3. Other Licensing Agreements: Gantt, Izod, Arrow and US Polo, VF Corporation and Tommy Hilfiger

4. Other Brands: Flying Machine, Excalibur and Newport.

5. Arvind Brand: 230 crore Subsidiary of Arvind Mills.

6. COO of Arvind Brand: J Suresh


Strategy

1. Energie Jeans would be priced on par with Diesel, which is having a 49:51 Joint venture with Reliance Group. Diesel carries a price tag of Rs. 8000 to 10000.

2. Energie will play in the super premium segment, Lee and Wrangler will be in the premium market.

3. Price of Energie will start at around 3500 for a pair of jeans

Apparel Brands in News- Lilliput

Brand Information

Lilliput 
Category: Children's Apparel and Accessories
Founder and MD: Sanjeev Narula
Established : 1991
Number of Stores: 260
Base: Delhi
Presence: India and 9 other countries
Turnover in March 2010: 415 crore
EBOs and MBOs

News:

1. Lilliput looking to open "Lilliput World" stores, where it will retail soft toys, baby walker, footwear, feeders and other accessories, besides clothing.

2. Private Equity Firm TPG has picked up minority stake (35%) in the company for 120 crores from domestic investment firm Everstone.

3. PE firm Bain Capital has picked up an undisclosed stake in Lilliput for Rs. 270 crore.

Current Topics for GD/PI- MFM- NIFT-2010

These, according to me, are the hot topics that can be discussed during group discussion and personal interviews:

1. You are brand manager of a casual apparel brand. How you can use social networking sites such as Facebook or Linkedin for the benefit of your brand.

2.Indian apparel retail post recession. Challenges and Opportunities. 

3.  If your brand is doing well in Metro cities, would it make sense to venture into the Tier-2 cities. How would the marketing mix ( product, price, place, promotion) be different there. 

4. Should apparel brands go on discounts at all ? Why ? Why not ?

5. Should there be any return policy for an apparel brand ? Why ? Why not 

6. Malls are not the same post recession. 

7. Rising Prices of Cotton Yarn- Boon or bane for Indian Exports. 

8. India should stick to manufacturing and selling traditional textiles and leave the manufacturing of other textiles to China and other countries.

9.Organic Textiles. Does it have a future or it is a mere eyewash .

10.India Advantage- Apparel and Textiles

11. Indian customer knows only one language- the language of discounts- every other strategy is useless.

You can read My Retail Notes to prepare for some of these topics.