Gas Jeans files application for single brand retail with DIPP

The company, owned by the Grotto of Italy, is present in India via franchise route and has 65 outlets here

Italian fashion apparel major Gas Jeans, stylised as GAS brand, has filed an application with the Department of Industrial Policy and Promotion (DIPP) to set up single-brand retail stores in India.

The company, owned by the Grotto of Italy, submitted the application on December 16. Gas Jeans is present in India via the franchise route and has 65 outlets in the country.

The brand's move comes after the government made a host of changes in the foreign direct investment (FDI) policy for single-brand retail in India. Some of the key changes include allowing single-brand retailers with foreign investment to sell online.

According to experts, with the changes in FDI policy for single-brand retail, more such international brands are likely to enter the Indian market.

"I think there would be an impetus on international brands, especially after the government allowed them to sell online on independent company-owned e-commerce websites. I believe major brands would enter India with limited retail presence, but have major operations online," said Rohit Bhatiani, director, Deloitte in India.

In August this year, Gas Jeans formed a joint venture with Reliance Brands for its expansion plans in India. The fashion vertical of Reliance Industries runs exclusive GAS outlets, while the wholesale & distribution business is handled by GAS Jeans India, a wholly-owned subsidiary of GAS brand owner Grotto.

It currently operates sales in 56 countries with around 3,000 stores.

GAS targets its products at the youth segment.

The recent changes were aimed at single-brand retail, which includes international brands such as Marks & Spencer, Zara, Hennes and Mauritz (H&M), Ikea, GAP, among others.

Adidas Group, the German sports footwear, hardware and apparel maker, is also gearing up to launch its own retail format stores in India.

Recently, Swedish fashion retailer H&M made its debut in India with two retail stores in Delhi. Although H&M's application for single-brand retail was approved in April 2014, the company opened its first store in October this year.

Under the changes made in FDI norms, retailers in the country via 51-per cent FDI and above would not have to start 30 per cent domestic sourcing from Indian manufacturers from the day they are given the permission for FDI.

"Extant FDI policy on SBRT (single-brand retail trading) mandates sourcing of 30 per cent of the value of goods purchased would be reckoned from the date of receipt of FDI. It has now been decided sourcing requirement has to be reckoned from the opening of first store," DIPP had said earlier.

According to DIPP officials, a host of companies are either investing in India or planning to do so. US-based fashion apparel major GAP, which opened its flagship store in New Delhi in May, has four stores in the country at present. H&M plans to invest ~720 crore in India and open 50 single-brand retail outlets in the next few years.