This story first appeared in DNA Money edition on Thursday, September 27, 2012.
Planet Retail has exited franchise agreements with three fashion brands – departmental store chain Debenhams and fashion brands Nautica and Next – as part of its business restructuring exercise.
The brands have been taken over by textile and apparel major Arvind Ltd’s wholly owned subsidiary Arvind Lifestyle Brands Ltd.
Ramesh Tainwala, chairman, Planet Retail Holdings Pvt Ltd, said, “I have just concluded the deal and have transferred all the rights in favour of Arvind Lifestyle Brands.”
He, however, did not share financial details. Industry experts said that the transaction value would not be very large as Planet Retail was not the owner of these brands but a franchisee for India.
“It would be difficult to put a value to the size of a deal of that nature,” said a retail consultant.
As part of the deal, Arvind will absorb all the 300-400 employees associated with the Indian operations of the three brands, Tainwala said.
Arvind Lifestyle Brands, which runs value retail chain Megamart, owns 50% stake in Tommy Hilfiger’s India unit. Its existing portfolio of international fashion apparel brands includes Gant, Arrow, US Polo, Elle and Flying Machine. Tainwala said they were looking for a strategic buyer who had expertise in both manufacturing as well as retailing of fashion brands.
“Our business model was based on 100% imports, which was a key concern for viability of the operations. This hurdle gets mitigated now as Arvind has its own manufacturing base and they can do a better job of retailing,” he said.
Arvind Singhal, chairman, Technopak Advisors Pvt Ltd, said international brands need retailing expertise and financial investments to get traction in the Indian market.“The Debenhams departmental chain, Nautica and Next are very good brands and I think the new partners will do a great job based by leveraging on their expertise,” he said.
Earlier, Planet Retail had given up rights on US fashion brand Guess to Major Brands, which markets Mango and Aldo in India.
Experts said Planet Retail had failed to make a mark for the brands brought in to the Indian market in 2007-08 mainly due to positioning and slowdown.
Updates from Arvind Ltd:
Announcing the acquisition on Thursday at a press conference held in Mumbai, Sanjay Lalbhai, chairman and managing director, Arvind Ltd said, “This acquisition is a significant milestone as it signals our entry into the department store segment and also the globally fast growing apparel specialty retail segment. American sportswear lifestyle brand Nautica makes us the dominant player in the sportswear segment. With this move, we have taken a big step towards strengthening our position in the Indian fashion industry. These acquisitions will accelerate our growth and contribute to our vision of achieving sales of Rs 5,000 crore over the next 5 years.”
J Suresh, managing director and CEO, Arvind Lifestyle Brands Ltd, said the company has a strong menswear portfolio, which will get further strengthened with Nautica. Debenhams and Next. "They will substantially strengthen our position in womenswear and kidswear segment. We plan to achieve Rs 500 crore revenue over next five years from current Rs 70 crore by investing Rs 150 crore in to these three brands,” he said.
Acquisition of Debenhams signals the entry of Arvind into the bridge to luxury department store segment. Arvind plans to increase the current number of Debenhams stores in India from two to eight in the next three years. Arvind will enter into the fast growing segment of apparel specialty retail through Next and plans to increase number of Next stores from three to 12 in the next three years.
A Debenhams' spokesperson said that the company is excited by the new chapter to be written together with Arvind. "The new partners are are a very solid and experienced retail group with a fantastic reputation. I’m confident that within the next five years, we’ll have eight fabulous Debenhams stores in five of India’s biggest cities."
Commenting on the acquisition, spokesperson from Next said, “We are very positive about the new franchise partnership and are looking forward to Arvind Brands re-launching the Next brand in India."
The licensing arrangement with Nautica will strengthen Arvind’s already strong position in high potential sportswear segment of the market. The company plans to set up additional 30 Nautica stores taking the tally to 41 free standing Nautica stores and 71 shop in shops in the next three years.
“We are excited to be working with Arvind Lifestyle Brands on the further development of this market,” said Maria Vicari, president, Global Licensing - Nautica Apparel Inc. “As we continue to grow our brand footprint internationally with our licensed operators around the globe, we look to Arvind with their significant expertise in brand building in India, to grow Nautica’s presence in this important emerging market.”
Planet Retail has exited franchise agreements with three fashion brands – departmental store chain Debenhams and fashion brands Nautica and Next – as part of its business restructuring exercise.
The brands have been taken over by textile and apparel major Arvind Ltd’s wholly owned subsidiary Arvind Lifestyle Brands Ltd.
Ramesh Tainwala, chairman, Planet Retail Holdings Pvt Ltd, said, “I have just concluded the deal and have transferred all the rights in favour of Arvind Lifestyle Brands.”
He, however, did not share financial details. Industry experts said that the transaction value would not be very large as Planet Retail was not the owner of these brands but a franchisee for India.
“It would be difficult to put a value to the size of a deal of that nature,” said a retail consultant.
As part of the deal, Arvind will absorb all the 300-400 employees associated with the Indian operations of the three brands, Tainwala said.
Arvind Lifestyle Brands, which runs value retail chain Megamart, owns 50% stake in Tommy Hilfiger’s India unit. Its existing portfolio of international fashion apparel brands includes Gant, Arrow, US Polo, Elle and Flying Machine. Tainwala said they were looking for a strategic buyer who had expertise in both manufacturing as well as retailing of fashion brands.
“Our business model was based on 100% imports, which was a key concern for viability of the operations. This hurdle gets mitigated now as Arvind has its own manufacturing base and they can do a better job of retailing,” he said.
Arvind Singhal, chairman, Technopak Advisors Pvt Ltd, said international brands need retailing expertise and financial investments to get traction in the Indian market.“The Debenhams departmental chain, Nautica and Next are very good brands and I think the new partners will do a great job based by leveraging on their expertise,” he said.
Earlier, Planet Retail had given up rights on US fashion brand Guess to Major Brands, which markets Mango and Aldo in India.
Experts said Planet Retail had failed to make a mark for the brands brought in to the Indian market in 2007-08 mainly due to positioning and slowdown.
Updates from Arvind Ltd:
Arvind targets Rs 5,000 crore in sales post acquisition of the new brands
Announcing the acquisition on Thursday at a press conference held in Mumbai, Sanjay Lalbhai, chairman and managing director, Arvind Ltd said, “This acquisition is a significant milestone as it signals our entry into the department store segment and also the globally fast growing apparel specialty retail segment. American sportswear lifestyle brand Nautica makes us the dominant player in the sportswear segment. With this move, we have taken a big step towards strengthening our position in the Indian fashion industry. These acquisitions will accelerate our growth and contribute to our vision of achieving sales of Rs 5,000 crore over the next 5 years.”
J Suresh, managing director and CEO, Arvind Lifestyle Brands Ltd, said the company has a strong menswear portfolio, which will get further strengthened with Nautica. Debenhams and Next. "They will substantially strengthen our position in womenswear and kidswear segment. We plan to achieve Rs 500 crore revenue over next five years from current Rs 70 crore by investing Rs 150 crore in to these three brands,” he said.
Acquisition of Debenhams signals the entry of Arvind into the bridge to luxury department store segment. Arvind plans to increase the current number of Debenhams stores in India from two to eight in the next three years. Arvind will enter into the fast growing segment of apparel specialty retail through Next and plans to increase number of Next stores from three to 12 in the next three years.
A Debenhams' spokesperson said that the company is excited by the new chapter to be written together with Arvind. "The new partners are are a very solid and experienced retail group with a fantastic reputation. I’m confident that within the next five years, we’ll have eight fabulous Debenhams stores in five of India’s biggest cities."
Commenting on the acquisition, spokesperson from Next said, “We are very positive about the new franchise partnership and are looking forward to Arvind Brands re-launching the Next brand in India."
The licensing arrangement with Nautica will strengthen Arvind’s already strong position in high potential sportswear segment of the market. The company plans to set up additional 30 Nautica stores taking the tally to 41 free standing Nautica stores and 71 shop in shops in the next three years.
“We are excited to be working with Arvind Lifestyle Brands on the further development of this market,” said Maria Vicari, president, Global Licensing - Nautica Apparel Inc. “As we continue to grow our brand footprint internationally with our licensed operators around the globe, we look to Arvind with their significant expertise in brand building in India, to grow Nautica’s presence in this important emerging market.”
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