Stockholm Stock Exchange-listed H&M, the world’s largest clothing retailer after Spain’s Inditex – the parent company of Zara – was in talks with three of the country’s leading fashion chains for its India foray, said two people with knowledge of the talks.
The names include those of textile major Arvind Ltd, Reliance Industries-owned Reliance Brands and Delhi-based luxury fashion retailer Genesis Colors, according to a person in the know. The Swedish fashion retailer wanted to get into a 51:49 joint venture with an Indian partner and lead the JV, he said.
“They want to partner with a group that has successful brands business and deep understanding of the Indian fashion retail,” said the person, declining to be identified.
When contacted, H&M Press Officer Hacan Andersson said: “At the moment, these are only rumours, and we have a policy of not commenting on rumours.”
Arvind Ltd Chairman & Managing Director Sanjay Lalbhai said: “We do not comment on companies we are in talks with and brands we want to launch.” Reliance Brands CEO Darshan Mehta declined to comment, and a Genesis Colors spokesperson did not offer any comment on the subject.
Consultants say H&M will move much more aggressively after the government comes out with more clarity on the mandatory 30 per cent sourcing in single-brand retail. Swedish furniture major IKEA, which has proposed a euro 1.5 billion investment in India, has issues with the sourcing norms.
“They have been in talks with various Indian companies for long. They have an issue with the single-brand retail policy. They must be waiting for clarity on the mandatory sourcing norm,” said Harminder Sahni, managing director, Wazir Advisors, a management consultancy.
Although H&M had held talks with DLF, Phoenix Mills and ITC in the past, the talks had not materialised.
“As and when H&M enters the Indian market, it will take Zara head-on, quite like in global markets,” said the head of department of a chain on the condition of anonymity.
The H&M group has 2,600 stores in 44 countries and has brands such as H&M and H&M Home as well as COS, Monki, Weekday and Cheap Monday.
Zara’s parent, Inditex, has 5,618 stores across the world.
In India, Zara has already taken a lead by forming a joint venture in 2009 with Tata-owned Trent to set up stores here. It runs eight Zara stores across Mumbai, Pune, Bangalore and Delhi and plans to open six to seven stores every year.
Reliance Brands has launched a dozen-odd brands in the country. These include Diesel, Paul& Shark and Timberland that straddle across luxury, affordable luxury and high premium segments. Arvind has brands such as Tommy Hilfiger, with which it has a joint venture.
Genesis Colors has also forged tie-ups with a number of luxury brands such as Canali, Bottega Veneta and Jimmy Choo, among others.
“In some markets H&M is collaborating with franchise partners, but franchising is not part of the general expansion strategy,” H&M says on its website.