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A year after signing a joint venture agreement to run stores under the Massimo Dutti brand, Tata-owned Trent and Massimo Dutti, Zara’s sister brand, are yet to open these stores.
The Zara and Massimo Dutti brands are owned by Spanish retail conglomerate Industria de Diseno Textil SA (Inditex).
An executive of the joint venture said the chain wanted to open stores in top locations/malls. “Finding marquee properties is taking time. If you see, Zara is present in top malls such as Palladium, Select City Walk and others; we want that for Massimo Dutti, too,” he said.
A mail sent to Trent did not elicit any response.
Prashant Agarwal, joint managing director, Wazir Advisors, said, “Definitely, there is only select bunch of such properties. But a brand such as Massimo Dutti can find a place. I think it is beyond property issues. There could be multiple reasons. Trent is a big group, they can talk and resolve the issue.”
It has been planned the joint venture will invest ^1.5 million (Rs 10 crore) through two years to open five Massimo Dutti stores.
Last year, Grupo Massimo Dutti SA, a subsidiary of Inditex, had filed an application with the Foreign Investment Promotion Board (FIPB), after the group’s previous application for the same brand was rejected.
FIPB had, in June 2012, rejected the group’s proposal to open Massimo Dutti stores in India, citing violation of a rule framed by the Department of Industrial Policy and Promotion, according to which an investor should own the brand it proposed to bring to India.
In 2012, the application was made by Zara Holdings Netherlands. Subsequently, the government relaxed the norms on brand ownership requirement.
Inditex already has its flagship Zara stores in India, through a 51:49 joint venture with Trent. In February 2009, Inditex had signed an agreement with the Tata group to form the joint venture to launch Zara outlets in India; the first store was opened in 2010. Currently, the venture runs Zara outlets in Mumbai, Pune, Bangalore and Delhi.
