MUMBAI: UB Group's overseas alcohol assets won't be used to raise funds for the Indian conglomerate's struggling Kingfisher Airlines Ltd subsidiary, a UB executive said on Monday, adding that the long-planned share listing was not imminent.
UB, whose interests span alcohol, airlines and sports teams, is under pressure to find a solution to Kingfisher's financial troubles as the carrier struggles to meet interest payments.
"Each of our businesses operates independently and no transfer of resources is envisaged from one operating entity to another," UB Group Chief Financial Officer Ravi Nedungadi told Reuters. "From the day we acquired Whyte & Mackay, we said we would consider listing it at some point. The point is not now."
UB, controlled by the flamboyant Indian businessman Vijay Mallaya, acquired Scottish whisky brand Whyte & Mackay (W&M) in 2007 for 595 million pounds ($909 million).
Kingfisher, hit by rising costs, fierce competition and a slowdown in the Indian economy, was forced to cancel flights late last year and is having trouble making interest payments and paying salaries to employees.
The airline owed 600 million rupees ($11.6 million) in service taxes as of last Tuesday. It also owes the government about 1.3 billion rupees of income tax deducted from employee salaries.
"Any plans we may have for W&M have nothing to do with Kingfisher Airlines," UB Group spokesman Prakash Mirpuri told Reuters. "However, there are no immediate plans in the offing."
Shares in United Breweries Ltd, the UB Group's flagship company, were up 5.3 percent at 468 rupees at 1230 (0630 GMT), having risen as much as 6 percent in early trading. The overall market was down 0.34 percent.
Shares in Kingfisher, which lost almost 70 percent of their value in 2011, were down 2.7 percent at 23.10 rupees.
Success in my Habit
Wednesday, January 25, 2012
No immediate plans to list Whyte & Mackay: UB Group
NEW DELHI: Vijay Mallya-led UB Group today said the company has no immediate plans to list its UK-based arm Whyte & Mackay although it had in the past stated such a step was a part of an overall future strategy.
"We have talked about listing W&M right from the time of acquisition. However, there are no immediate plans in the offing," a spokesperson of the UB Group told PTI.
United Spirits Ltd, a UB Group firm, had acquired Whyte & Mackay for 595 million pounds in 2007.
Reacting to reports of the group leveraging on the proceeds from a possible listing of W&M to bail out ailing group firm Kingfisher Airlines, the spokesperson said: "We would like to clarify that any plans we may have for Whyte & Mackay has nothing to do with Kingfisher Airlines."
The group, which has interests in diverse verticals including alcohol, airlines and sports teams, is under stress to find a solution for Kingfisher Airlines' financial troubles as the carrier struggles to meet interest payments.
In December 2011, the government had informed Parliament that Kingfisher Airlines has an outstanding loan of about Rs 6,419 crore, and the lenders include SBI, IDBI Bank, Punjab National Bank, Bank of India and Bank of Baroda.
Recently Mallya, who is also a Rajya Sabha MP, has held a series of meetings with top government functionaries, including Finance Minister Pranab Mukherjee, to work out steps to keep the airline afloat.
Shares of United Spirits Ltd were trading at Rs 630.50 on the BSE in the late afternoon, up 5.03 per cent from its previous close.
"We have talked about listing W&M right from the time of acquisition. However, there are no immediate plans in the offing," a spokesperson of the UB Group told PTI.
United Spirits Ltd, a UB Group firm, had acquired Whyte & Mackay for 595 million pounds in 2007.
Reacting to reports of the group leveraging on the proceeds from a possible listing of W&M to bail out ailing group firm Kingfisher Airlines, the spokesperson said: "We would like to clarify that any plans we may have for Whyte & Mackay has nothing to do with Kingfisher Airlines."
The group, which has interests in diverse verticals including alcohol, airlines and sports teams, is under stress to find a solution for Kingfisher Airlines' financial troubles as the carrier struggles to meet interest payments.
In December 2011, the government had informed Parliament that Kingfisher Airlines has an outstanding loan of about Rs 6,419 crore, and the lenders include SBI, IDBI Bank, Punjab National Bank, Bank of India and Bank of Baroda.
Recently Mallya, who is also a Rajya Sabha MP, has held a series of meetings with top government functionaries, including Finance Minister Pranab Mukherjee, to work out steps to keep the airline afloat.
Shares of United Spirits Ltd were trading at Rs 630.50 on the BSE in the late afternoon, up 5.03 per cent from its previous close.
Amul to hot up frozen yogurt market
VADODARA: Dairy major Amul is now eyeing the growing frozen yogurt market in the country. The Gujarat Cooperative Milk Marketing Federation (GCMMF) that markets brand Amul has launched frozen yogurt - a first-of-its-kind product offering from Amul's basket. Frozen yogurt, a tangy combination of ice-cream with probiotic yogurt, is a globally established category.
Amul's move comes at a time when a string of frozen yogurt chains are entering the country riding on the healthier , guilt-free dessert plank creating a space within the traditional ice-cream market.
If US-based yogurt brand Red Mango has made a debut in the Indian market this month following the Canadian yogurt chain Kiwi Kiss, which had forayed in the Indian market last year, Singapore-headquartered yogurt brand Berrylite is firming up its plans to open outlets soon.
But home-grown Amul is set to give these brands a run for their money as it plans to launch the new product across 70,000 outlets across the country in the first week of February against nearly 40 outlets managed by the international brands. India's organized ice-cream market is estimated at Rs 1,200 crore and Amul currently commands 40% market share.
With the launch of this new product under the brand name - Amul Flaavyo - Amul wants to revolutionize the ice-cream market while becoming the "first mover" in this new category among Indian companies. "We are expecting that the frozen yogurt highway would account for 5% of total ice-cream sales," GCMMF's managing director R S Sodhi told reporters.
"As many are becoming health conscious, the market for frozen yoghurt is going to grow. We estimate that it would expand the market by increasing customer base. Essentially it would not only convert non-consumers of icecream into eaters but also increase frequency of ice-cream consumption," Sodhi said.
The Amul frozen yoghurt is presently available at select Amul scooping parlours. Amul has a chain of 500 scooping parlours across the country. Initially, the dairy giant has introduced the product at its scooping parlours at Rs 35 per scoop (against Rs 100 per scoop charged by international brands).
"In February first week, we will launch consumer packs across the country while making Amul Flaavyo Frozen Yogurt available in smaller packs in two flavours - mango and strawberry," Sodhi said.
Amul's move comes at a time when a string of frozen yogurt chains are entering the country riding on the healthier , guilt-free dessert plank creating a space within the traditional ice-cream market.
If US-based yogurt brand Red Mango has made a debut in the Indian market this month following the Canadian yogurt chain Kiwi Kiss, which had forayed in the Indian market last year, Singapore-headquartered yogurt brand Berrylite is firming up its plans to open outlets soon.
But home-grown Amul is set to give these brands a run for their money as it plans to launch the new product across 70,000 outlets across the country in the first week of February against nearly 40 outlets managed by the international brands. India's organized ice-cream market is estimated at Rs 1,200 crore and Amul currently commands 40% market share.
With the launch of this new product under the brand name - Amul Flaavyo - Amul wants to revolutionize the ice-cream market while becoming the "first mover" in this new category among Indian companies. "We are expecting that the frozen yogurt highway would account for 5% of total ice-cream sales," GCMMF's managing director R S Sodhi told reporters.
"As many are becoming health conscious, the market for frozen yoghurt is going to grow. We estimate that it would expand the market by increasing customer base. Essentially it would not only convert non-consumers of icecream into eaters but also increase frequency of ice-cream consumption," Sodhi said.
The Amul frozen yoghurt is presently available at select Amul scooping parlours. Amul has a chain of 500 scooping parlours across the country. Initially, the dairy giant has introduced the product at its scooping parlours at Rs 35 per scoop (against Rs 100 per scoop charged by international brands).
"In February first week, we will launch consumer packs across the country while making Amul Flaavyo Frozen Yogurt available in smaller packs in two flavours - mango and strawberry," Sodhi said.
Branded pulses being launched by Adani Wilmar, Lakshmi Energy Foods
After Tata's it is now Adani Wilmar, Lakshmi Energy Foods which will be launching varieties of branded pulses/ dals on a pan India basis. Pulses are a rich source of protein and an integral part of an Indian meal. The sector is in the novice stage with a strong presence of regional players who are also on an expansion spree.
Pulsesconsumption in India is currently about 17.5 million tonne annually, of which, negligible quantity of pulsesare sold in branded form. Further,small quantity is sold by Kirana stores and modern trade as their in-store brands.
"We see big future in branding of all commodities . Just as we have witnessed consumption of edible oil in branded form, we anticipate a similar conversion from purchase of loose unbranded pulsesto branded form," said Adani Wilmar, MD, Pranav Adani.
The company will be launching the brand in north India,selling under the Jubilee brand name. Moong, Masoor, Arhar, Urad, Chana and Rajma pulses(including both whole and split variants) that cumulatively comprise over 80% of the market would be initially launched.
Eventually the company plan to extend the portfolio to include besan and other value added products. As per industry source Adani is planning to invest Rs 100 crore for the processing unit with a capacity to mill 600 tonnes per day at either Kolkata or Kanpur.
Similarly, leading basmati player from Punjab ,Lakshmi Overseas Industries Ltd will be investing Rs 50 crore to set up a pulse processing mill of 200 TPD at Khamanon near Ludhiana.
"India is the largest producer,consumer and importer of pulses. The regional players limit themselves to one or two types of pulsesin their portfolio leaving a huge scope for a national player to enter and revolutionize the way the industry works," said Lakshmi Overseas Industries Ltd, MD, Balbir Singh Uppal.
In December 2010, Tata Chemicals launched popular varieties of pulses- chana, toor, urad and moong (including whole green moong and green chilka) under the i-Shakti Dals.Working along with farmers the company targeted to increase production of pulsesin India and help bridge the existing gap between demand and supply of pulsesin the country.
"We are providing consumer un-polished pulseswith low moisture content ensuring speedy cooking and increased shelf life of 6 months," said Tata Chemicals, consumer products business, chief operating officer, Ashvini Hiran who added that the demand was good across tier 1 and tier 2 cities where sales were through modern trade channels and malls.
Established regional players charge Rs 6 to Rs 10 a kg as a premium. With no major value addition apart from cleaning and polishing (leather polishing or water based polishing) to bring the shine in the pulse, more investment is coming in the sector.
In northern India the major pulsesbrand were Rajdhani, Mangat Ram Dal Mills, in Eastern India Taj agro international, Daily were popular whereas Lakshmi, Angur and Rantio were popular varieties of Western India.
Nandi brand and Shree Gold brand of the Kaleesuwari Refinery Pvt Ltd were household name in South India. Central Indian pulse brand included Hasty Tasty, Swach and Mani.
Processing over 65 tpd pulses, Gujarat based Patel Chaturbhai Ranchhodbhai & Co, is the market leader in pigeon peas (tur dal/arhar dal) in the state selling under the brand name of Angur.
"We see an annual growth of 10% to 15% and are expanding our capacity," said the company's partner, Piyush Ratilal Patel.He added that the company was only focusing on selling pigeon peas and were not expanding the portfolio. The company is selling the branded pulse in retail outlets of Reliance, Big Bazaar, Star Bazaar, Dmart and others.
Pulsesconsumption in India is currently about 17.5 million tonne annually, of which, negligible quantity of pulsesare sold in branded form. Further,small quantity is sold by Kirana stores and modern trade as their in-store brands.
"We see big future in branding of all commodities . Just as we have witnessed consumption of edible oil in branded form, we anticipate a similar conversion from purchase of loose unbranded pulsesto branded form," said Adani Wilmar, MD, Pranav Adani.
The company will be launching the brand in north India,selling under the Jubilee brand name. Moong, Masoor, Arhar, Urad, Chana and Rajma pulses(including both whole and split variants) that cumulatively comprise over 80% of the market would be initially launched.
Eventually the company plan to extend the portfolio to include besan and other value added products. As per industry source Adani is planning to invest Rs 100 crore for the processing unit with a capacity to mill 600 tonnes per day at either Kolkata or Kanpur.
Similarly, leading basmati player from Punjab ,Lakshmi Overseas Industries Ltd will be investing Rs 50 crore to set up a pulse processing mill of 200 TPD at Khamanon near Ludhiana.
"India is the largest producer,consumer and importer of pulses. The regional players limit themselves to one or two types of pulsesin their portfolio leaving a huge scope for a national player to enter and revolutionize the way the industry works," said Lakshmi Overseas Industries Ltd, MD, Balbir Singh Uppal.
In December 2010, Tata Chemicals launched popular varieties of pulses- chana, toor, urad and moong (including whole green moong and green chilka) under the i-Shakti Dals.Working along with farmers the company targeted to increase production of pulsesin India and help bridge the existing gap between demand and supply of pulsesin the country.
"We are providing consumer un-polished pulseswith low moisture content ensuring speedy cooking and increased shelf life of 6 months," said Tata Chemicals, consumer products business, chief operating officer, Ashvini Hiran who added that the demand was good across tier 1 and tier 2 cities where sales were through modern trade channels and malls.
Established regional players charge Rs 6 to Rs 10 a kg as a premium. With no major value addition apart from cleaning and polishing (leather polishing or water based polishing) to bring the shine in the pulse, more investment is coming in the sector.
In northern India the major pulsesbrand were Rajdhani, Mangat Ram Dal Mills, in Eastern India Taj agro international, Daily were popular whereas Lakshmi, Angur and Rantio were popular varieties of Western India.
Nandi brand and Shree Gold brand of the Kaleesuwari Refinery Pvt Ltd were household name in South India. Central Indian pulse brand included Hasty Tasty, Swach and Mani.
Processing over 65 tpd pulses, Gujarat based Patel Chaturbhai Ranchhodbhai & Co, is the market leader in pigeon peas (tur dal/arhar dal) in the state selling under the brand name of Angur.
"We see an annual growth of 10% to 15% and are expanding our capacity," said the company's partner, Piyush Ratilal Patel.He added that the company was only focusing on selling pigeon peas and were not expanding the portfolio. The company is selling the branded pulse in retail outlets of Reliance, Big Bazaar, Star Bazaar, Dmart and others.
MandhanaIndustries, Landmark Group ink deal to sell Being Human apparel
NEW DELHI: Mumbai-based textile firm Mandhana Industries, which has the exclusive license for Salman Khan's 'Being Human' apparel range worldwide, has signed up with Dubai-based Landmark Group to sell the clothing line in Middle East from April this year.
Mandhana Industries that has rights to manufacture, distribute and retail 'Being Human' range of garments, is also in talks with retailers in Europe while it gets ready to open flagship stores for the brand in India by March this year.
"We have tied up with Landmark Group to retail 'Being Human' apparel at over 200 stores operated by Landmark under Iconic and Splash brands (in Middle East)," Mandhana Industries, Senior-Vice President Finance and Corporate Affairs Mitesh Shah told PTI.
The brand will be launched in the region by April this year but before that it will be launched in India, he added.
As a part of an agreement between Mandhana and Landmark, the range will be sold countries in the region, including UAE, Egypt, Bahrain, Saudi Arabia, Oman, Kuwait, Jordan, Lebanon and Qatar.
Commenting on other overseas plans, Shah said: "We are also engaged in discussions with few retailers in Europe and expect to launch the label in countries like France, Germany and UK within this year."
In India, the company had planned to launch the brand last year but after delays it is likely to take place by March this year.
"To begin with we plan to open 6-7 flagship stores in India which will be operated by Mandhana and we are also in talks with other retailers to sell the range," Shah added.
The Being Human Foundation is founded by Bollywood actor Salman Khan to uplift the underprivileged. Mandhana, on the other hand supplies textiles and garments to leading Indian and international apparel manufacturers and retailers.
Mandhana Industries that has rights to manufacture, distribute and retail 'Being Human' range of garments, is also in talks with retailers in Europe while it gets ready to open flagship stores for the brand in India by March this year.
"We have tied up with Landmark Group to retail 'Being Human' apparel at over 200 stores operated by Landmark under Iconic and Splash brands (in Middle East)," Mandhana Industries, Senior-Vice President Finance and Corporate Affairs Mitesh Shah told PTI.
The brand will be launched in the region by April this year but before that it will be launched in India, he added.
As a part of an agreement between Mandhana and Landmark, the range will be sold countries in the region, including UAE, Egypt, Bahrain, Saudi Arabia, Oman, Kuwait, Jordan, Lebanon and Qatar.
Commenting on other overseas plans, Shah said: "We are also engaged in discussions with few retailers in Europe and expect to launch the label in countries like France, Germany and UK within this year."
In India, the company had planned to launch the brand last year but after delays it is likely to take place by March this year.
"To begin with we plan to open 6-7 flagship stores in India which will be operated by Mandhana and we are also in talks with other retailers to sell the range," Shah added.
The Being Human Foundation is founded by Bollywood actor Salman Khan to uplift the underprivileged. Mandhana, on the other hand supplies textiles and garments to leading Indian and international apparel manufacturers and retailers.
Godrej Consumer plans to raise Rs 685 cr from Temasek
MUMBAI: Personal care products maker Godrej Consumer Ltd had decided to sell a 4.9% stake to Baytree Investments, an arm of Singapore-based investment firm Temasek, to raise Rs 685 crore for acquisitions and reduce debts.
Baytree will subscribe over 1.67 crore shares at Rs 410 a share on a preferential allotment basis, subject to the signing of a share subscription agreement and shareholders approval.
"The fund will be used for further acquisitions as well as reduce debt in the company," chairman Adi Godrej said on Saturday. "If we had to do QIP, there would have been significant cost. Hence, we chose the preferential allotment route," he said.
The fund raising plans followed after the maker of Cinthol and Goodknight announced on Saturday it will acquire 60 % stake in Latin America's Cosmetica Nacional, a hair care and cosmetics company for an undisclosed sum. However, the company said the deal is nine times the company's Ebitda of 20% and with its annual sales of 36 million, the deal size comes to roughly Rs 200 crore.
The Chilean firm, which owns brands such as Ilicit, U2 and Pamela Grant exports to over seven countries in the region and will serve as another distribution platform in Latin America. This is GCPL's third buy in Latin America after acquisition of Argencos and Issue two years ago. Godrej also said he continues to look for buys in Africa, Asia and Latin America.
"The acquisition will give the company a strong leadership position in the particular region. In addition, the fund raising plan will help them acquire more companies," said Anand Mour, senior analyst at Ambit Capital.
In the last four years, the Indian soaps, deodorants and hair colour maker has acquired nine firms including Indonesia's household care firm PT Megasari Makmur Group, Nigerian personal care company Tura and two South African haircare brands, Rapidol and Kinky.
Apart from acquisitions, GCPL also merged Godrej Household Products with itself and earned profits by selling Sara Lee's brands where it was a licensee. The company also announced its third quarter numbers posting a higher-than-estimated 41% rise in October-December quarter profit despite foreign exchange losses.
The company posted a net profit after minority interest of Rs 272 crore during the quarter. Its revenue rose 36% from a year ago to Rs 1,344 crore helped by global acquisitions and new product launches in domestic business.
The company incurred a foreign exchange loss of `6 crore compared with a forex loss of Rs 1 crore a year ago. Godrej Consumer had 20% sales growth in its domestic business on account of higher volume or consumer demand with net profit increase of 12%.
Baytree will subscribe over 1.67 crore shares at Rs 410 a share on a preferential allotment basis, subject to the signing of a share subscription agreement and shareholders approval.
"The fund will be used for further acquisitions as well as reduce debt in the company," chairman Adi Godrej said on Saturday. "If we had to do QIP, there would have been significant cost. Hence, we chose the preferential allotment route," he said.
The fund raising plans followed after the maker of Cinthol and Goodknight announced on Saturday it will acquire 60 % stake in Latin America's Cosmetica Nacional, a hair care and cosmetics company for an undisclosed sum. However, the company said the deal is nine times the company's Ebitda of 20% and with its annual sales of 36 million, the deal size comes to roughly Rs 200 crore.
The Chilean firm, which owns brands such as Ilicit, U2 and Pamela Grant exports to over seven countries in the region and will serve as another distribution platform in Latin America. This is GCPL's third buy in Latin America after acquisition of Argencos and Issue two years ago. Godrej also said he continues to look for buys in Africa, Asia and Latin America.
"The acquisition will give the company a strong leadership position in the particular region. In addition, the fund raising plan will help them acquire more companies," said Anand Mour, senior analyst at Ambit Capital.
In the last four years, the Indian soaps, deodorants and hair colour maker has acquired nine firms including Indonesia's household care firm PT Megasari Makmur Group, Nigerian personal care company Tura and two South African haircare brands, Rapidol and Kinky.
Apart from acquisitions, GCPL also merged Godrej Household Products with itself and earned profits by selling Sara Lee's brands where it was a licensee. The company also announced its third quarter numbers posting a higher-than-estimated 41% rise in October-December quarter profit despite foreign exchange losses.
The company posted a net profit after minority interest of Rs 272 crore during the quarter. Its revenue rose 36% from a year ago to Rs 1,344 crore helped by global acquisitions and new product launches in domestic business.
The company incurred a foreign exchange loss of `6 crore compared with a forex loss of Rs 1 crore a year ago. Godrej Consumer had 20% sales growth in its domestic business on account of higher volume or consumer demand with net profit increase of 12%.
ITC may invest up to Rs 1,000 cr in 4 years on FMCG business
NEW DELHI: Diversified business group ITC is understood to be gearing up to invest up to Rs 1,000 crore in the FMCG segment in the next four years which will include setting up new facilities and enhancing existing capacities.
According to UBS Investment Research, which had met the company's top management recently, ITC is planning to invest Rs 600 crore to Rs 1,000 crore in the next three years.
The Kolkata-based company did not confirm the figure but said it will invest in building state of the art manufacturing facilities, logistics as well as ramping up existing capacity.
"Given the rapid growth of the fast moving consumer goods segment in India which is expected to triple in size in the next 10 years, ITC is pursuing an aggressive investment led growth strategy,"ITC Executive Director Kurush Grant told PTI.
Without confirming how much the company plans to invest, Grant said ITC is investing heavily in technology and manufacturing, fixed assets, brand building, R&D, product development and consumer insights to build market standing.
"We will invest in building state of the art manufacturing facilities, logistics as well as ramping up existing capacity," he added.
The UBS Investment Research report, however, said "(ITC's) losses in other FMCG are coming down, but they (ITC management) warn that the new food businesses will involve higher investments; Rs600 crore to Rs 1,000 crore over the next 3-4 years."
Under the FMCG division, ITC sells branded packaged foods under the brands Bingo, Sunfeast and Yippee among others, personal care range like Vivel and Fiama di Wills apart from stationery products, cigarettes and lifestyle apparel.
Over the last few years company has rapidly scaled up its FMCG businesses and has entered in new categories over the last few years like instant noodles, pasta, biscuits among others. In the quarter ended December 31, 2011 its FMCG business registered a revenue of Rs 4,603.66 crore, witnessing a growth of 19 per cent over the previous fiscal.
"This expansion of the FMCG portfolio not only requires establishment of new manufacturing operations but also creation of efficient supply chain, enhancement of logistics infrastructure and efficient multiple distribution channels across multiple locations," Grant said.
According to UBS Investment Research, which had met the company's top management recently, ITC is planning to invest Rs 600 crore to Rs 1,000 crore in the next three years.
The Kolkata-based company did not confirm the figure but said it will invest in building state of the art manufacturing facilities, logistics as well as ramping up existing capacity.
"Given the rapid growth of the fast moving consumer goods segment in India which is expected to triple in size in the next 10 years, ITC is pursuing an aggressive investment led growth strategy,"ITC Executive Director Kurush Grant told PTI.
Without confirming how much the company plans to invest, Grant said ITC is investing heavily in technology and manufacturing, fixed assets, brand building, R&D, product development and consumer insights to build market standing.
"We will invest in building state of the art manufacturing facilities, logistics as well as ramping up existing capacity," he added.
The UBS Investment Research report, however, said "(ITC's) losses in other FMCG are coming down, but they (ITC management) warn that the new food businesses will involve higher investments; Rs600 crore to Rs 1,000 crore over the next 3-4 years."
Under the FMCG division, ITC sells branded packaged foods under the brands Bingo, Sunfeast and Yippee among others, personal care range like Vivel and Fiama di Wills apart from stationery products, cigarettes and lifestyle apparel.
Over the last few years company has rapidly scaled up its FMCG businesses and has entered in new categories over the last few years like instant noodles, pasta, biscuits among others. In the quarter ended December 31, 2011 its FMCG business registered a revenue of Rs 4,603.66 crore, witnessing a growth of 19 per cent over the previous fiscal.
"This expansion of the FMCG portfolio not only requires establishment of new manufacturing operations but also creation of efficient supply chain, enhancement of logistics infrastructure and efficient multiple distribution channels across multiple locations," Grant said.
Kelme to enter India, appoints Global Overseas as partner
NEW DELHI: Spanish sportswear and fashion brand Kelme is entering India through a licensing and distribution agreement with Global Overseas and plans to open up to 10 stores during the first year of operations.
"India has been a part of our international plan for the last 3-4 years. Now, we are entering India in partnership with Global Overseas through a licensing and distribution arrangement," Kelme Director International Business Luca Gios told reporters.
Ghaziabad headquartered Global Overseas is a part of the Singapore-based Sports Fashion (SF). Kelme is owned by New Millennium Sports that has tie up with SF for Asia Pacific region. Elaborating on the plans for the Indian market, where the government had recently allowed 100 foreign direct investment in single brand retail, he said: "In the first year we plan to open 7-10 stores in the country. The first one has been set up in Delhi."
Gios said the decision to partner a local firm despite the opportunity to do it on its own is a part of Kelme's global strategy.
"We follow distribution and licensing model worldwide. You have to think globally and act locally," he said.
The agreement with Global Overseas also covers local manufacturing, he said.
"We will also give license to our partner here to locally manufacture some of the products. Local production should start in the next two to three months," he said.
The brand is present in 45 countries worldwide. Established in 1977, Kelme was the equipment sponsor of the Spanish Olympic team in 1992 Barcelona Olympic Games. It was also the sponsor of the Real Madrid football club from 1994 to 1998.
"India has been a part of our international plan for the last 3-4 years. Now, we are entering India in partnership with Global Overseas through a licensing and distribution arrangement," Kelme Director International Business Luca Gios told reporters.
Ghaziabad headquartered Global Overseas is a part of the Singapore-based Sports Fashion (SF). Kelme is owned by New Millennium Sports that has tie up with SF for Asia Pacific region. Elaborating on the plans for the Indian market, where the government had recently allowed 100 foreign direct investment in single brand retail, he said: "In the first year we plan to open 7-10 stores in the country. The first one has been set up in Delhi."
Gios said the decision to partner a local firm despite the opportunity to do it on its own is a part of Kelme's global strategy.
"We follow distribution and licensing model worldwide. You have to think globally and act locally," he said.
The agreement with Global Overseas also covers local manufacturing, he said.
"We will also give license to our partner here to locally manufacture some of the products. Local production should start in the next two to three months," he said.
The brand is present in 45 countries worldwide. Established in 1977, Kelme was the equipment sponsor of the Spanish Olympic team in 1992 Barcelona Olympic Games. It was also the sponsor of the Real Madrid football club from 1994 to 1998.
Canali buys 51% stake in Genesis JV
NEW DELHI: Italian luxury brand Canali has picked up 51% stake to form a joint venture with its Indian franchise, Genesis Luxury Fashion, two persons familiar with the matter said.
Though Canali had the option to set up a wholly-owned subsidiary, following the government's decision last month to allow 100% foreign direct investment in single-brand retail, it has opted to stick to the previous ceiling.
A higher shareholding would have required it to mandatorily source 30% of its products from Indian small and medium enterprises, the persons quoted earlier explained.
Small and medium enterprises are defined as companies that have a total investment in plant and machinery not exceeding $1 million.
A Genesis Luxury Fashion spokesperson declined to comment on the JV plan, which is awaiting the government's clearance.
Canali is the first luxury brand to invest in India since the government removed the cap for foreign companies. Genesis, a franchise for several global luxury brands, has been operating five Canali stores in India - two in the National Capital Region, at the DLF Emporio Mall and at the Oberoi hotel in Gurgaon, and one each in Mumbai's Palladium mall, Hyderabad's Taj Krishna hotel and Bangalore's UB City mall.
"Canali is bullish about India and it might also venture into some of the smaller cities if good retail infrastructure comes up there," an industry expert, who works with various global luxury brands, said on condition of anonymity.
Global brands are increasingly eyeing India where the luxury market is growing at 20% a year and is expected to expand to $14.7 billion by 2015, from $5.8 billion, according to a recent report by CII and AT Kearney.
India has three million affluent households, defined as those with more than $100,000 (about Rs 50 lakh) of investable surplus, a global affluence study by research firm TNS said. The number of high net worth individuals, who have assets of $1 million or more, will more than double to 403,000 by 2015, Swiss wealth manager Julius Baer recently forecast.
Though Canali had the option to set up a wholly-owned subsidiary, following the government's decision last month to allow 100% foreign direct investment in single-brand retail, it has opted to stick to the previous ceiling.
A higher shareholding would have required it to mandatorily source 30% of its products from Indian small and medium enterprises, the persons quoted earlier explained.
Small and medium enterprises are defined as companies that have a total investment in plant and machinery not exceeding $1 million.
A Genesis Luxury Fashion spokesperson declined to comment on the JV plan, which is awaiting the government's clearance.
Canali is the first luxury brand to invest in India since the government removed the cap for foreign companies. Genesis, a franchise for several global luxury brands, has been operating five Canali stores in India - two in the National Capital Region, at the DLF Emporio Mall and at the Oberoi hotel in Gurgaon, and one each in Mumbai's Palladium mall, Hyderabad's Taj Krishna hotel and Bangalore's UB City mall.
"Canali is bullish about India and it might also venture into some of the smaller cities if good retail infrastructure comes up there," an industry expert, who works with various global luxury brands, said on condition of anonymity.
Global brands are increasingly eyeing India where the luxury market is growing at 20% a year and is expected to expand to $14.7 billion by 2015, from $5.8 billion, according to a recent report by CII and AT Kearney.
India has three million affluent households, defined as those with more than $100,000 (about Rs 50 lakh) of investable surplus, a global affluence study by research firm TNS said. The number of high net worth individuals, who have assets of $1 million or more, will more than double to 403,000 by 2015, Swiss wealth manager Julius Baer recently forecast.
LVMH co Sephora set for India foray
MUMBAI: French luxury goods conglomerate Moet Hennessy Louis Vuitton SA (LVMH) is likely to clinch a multi-brand retail deal with New Delhi-based Genesis Luxury Fashion, in which the former's private equity arm L Capital holds a significant minority stake. Genesis Luxury is expected to open doors for LVMH's subsidiary Sephora, a multi-brand beauty and personal care retailer, with a licensing deal as talks failed with other contenders like Reliance Retail and Parcos, said two separate sources familiar with the matter.
LVMH is finalizing plans for Sephora a little over a month after India deferred foreign direct investment (FDI) in multi-brand retail. The 20-billion-euro luxury group's discussion with Genesis also signals its deepening ties with the Indian company after L Capital last year picked up 25.5% equity in the Sanjay Kapoorowned firm, which operates single-brand stores Just Cavalli, Canali, Paul Smith and Jimmy Choo. LVMH has independent operations of its flagship Louis Vuitton stores in the country. When contacted by TOI, a spokesperson for Genesis Luxury Fashion declined comment on its partnership with LVMH to bring Sephora to India, adding they would talk about their plans in time.
Industry observers said Sephora's deal-making with Genesis would be innovative following the L Capital investment in the latter. L Capital is sponsored by LVMH and Groupe Arnault-the private holding company of business tycoon and LVMH chairman Bernard Arnault-managing assets worth over 900 million euros. The Sephora stores are likely to open by end of this year offering cosmetic, skin care, fragrance, bath and body, hair care across multiple brands. The retail chain also has a hugely popular private label brand in its name which is moderately priced as well as a strong online presence across markets. Sephora has over 1,200 stores globally.
LVMH has been scouting for a partner to unfurl its multibrand retail operations in India, and had held discussions with multiple suitors, including Reliance Retail, a part of India's largest private sector company Reliance Industries. One of the sources mentioned earlier said LVMH always seeks control over retail operations, and would have preferred Genesis given its existing investment ties. This would also provide the group enough flexibility to expand Sephora's India business.
Sephora and DFS (a dutyfree store chain) are the two multi-brand retail businesses of LVMH. The Paris-based group is betting big on the potential of its multi-brand channels in emerging markets like India. DFS has been in talks with the country's swanky new airports to start operations. The Indian beauty retail market is largely unorganized with department store chain such as Shoppers Stop and Lifestyle offering shop-in-shop outlets for most of the high-end brands operating in the segment. "The key challenges facing the industry are low consumer awareness, limited supply side push and product, infrastructure/retail channel availability. This is where a multi-brand outlet which offers a plethora of choices has a huge potential to succeed," said Neelesh Hundekari, principal at consulting firm AT Kearney.
An AT Kearney-CII report on the luxury market said the personal care segment in India is estimated at $280 million as of 2010 and growing at 22%. Typically, a female consumer dominated market in other countries, with a significant share of cosmetics and skin care, the Indian market stands out for its fragrance domination.
LVMH is finalizing plans for Sephora a little over a month after India deferred foreign direct investment (FDI) in multi-brand retail. The 20-billion-euro luxury group's discussion with Genesis also signals its deepening ties with the Indian company after L Capital last year picked up 25.5% equity in the Sanjay Kapoorowned firm, which operates single-brand stores Just Cavalli, Canali, Paul Smith and Jimmy Choo. LVMH has independent operations of its flagship Louis Vuitton stores in the country. When contacted by TOI, a spokesperson for Genesis Luxury Fashion declined comment on its partnership with LVMH to bring Sephora to India, adding they would talk about their plans in time.
Industry observers said Sephora's deal-making with Genesis would be innovative following the L Capital investment in the latter. L Capital is sponsored by LVMH and Groupe Arnault-the private holding company of business tycoon and LVMH chairman Bernard Arnault-managing assets worth over 900 million euros. The Sephora stores are likely to open by end of this year offering cosmetic, skin care, fragrance, bath and body, hair care across multiple brands. The retail chain also has a hugely popular private label brand in its name which is moderately priced as well as a strong online presence across markets. Sephora has over 1,200 stores globally.
LVMH has been scouting for a partner to unfurl its multibrand retail operations in India, and had held discussions with multiple suitors, including Reliance Retail, a part of India's largest private sector company Reliance Industries. One of the sources mentioned earlier said LVMH always seeks control over retail operations, and would have preferred Genesis given its existing investment ties. This would also provide the group enough flexibility to expand Sephora's India business.
Sephora and DFS (a dutyfree store chain) are the two multi-brand retail businesses of LVMH. The Paris-based group is betting big on the potential of its multi-brand channels in emerging markets like India. DFS has been in talks with the country's swanky new airports to start operations. The Indian beauty retail market is largely unorganized with department store chain such as Shoppers Stop and Lifestyle offering shop-in-shop outlets for most of the high-end brands operating in the segment. "The key challenges facing the industry are low consumer awareness, limited supply side push and product, infrastructure/retail channel availability. This is where a multi-brand outlet which offers a plethora of choices has a huge potential to succeed," said Neelesh Hundekari, principal at consulting firm AT Kearney.
An AT Kearney-CII report on the luxury market said the personal care segment in India is estimated at $280 million as of 2010 and growing at 22%. Typically, a female consumer dominated market in other countries, with a significant share of cosmetics and skin care, the Indian market stands out for its fragrance domination.
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