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After Swedish furniture major IKEA’s Rs 10,500-crore proposal got cleared by the Foreign Investment Promotion Board (FIPB), other international chains operating in similar space have filed their applications for opening single-brand retail stores in India.
Last week, an American company, Sealy, which specializes in beds and mattresses, put in its proposal with the Department of Industrial Policy and Promotion (DIPP). Around the same time, an European company, Villeroy & Boch, known for its ceramic manufacturing as well as its lifestyle offerings for modern home, too filed its application, a DIPP official confirmed.
In fact, the government received three single brand applications last week, the third one from US-based Svapas Innovations for rolling out healthcare stores, with focus on ayurveda. The investment proposed by these three companies is much less than IKEA’s, the official said. But, the number of applications coming from single brand retail chains is a positive development, he added.
Sealy had opened its offices in India last year, but has been operating only in the business to business or wholesale space so far. The company wants to sell its products to retail consumers across outlets in India now. Germany-headquartered Villeroy & Boch is represented in 125 countries and has 15 production facilities in Europe, Mexico and Thailand.
The company, according to its website, sees potential for the brand in Asia, especially in China, India and West Asia. The percentage of sales generated abroad has risen in the last 15 years from 46% to 73%, it said. At Svapas,the focus areas include healthcare, education, and retail.
Single brand retail space has seen action in the recent months, while multi-brand has remained silent. While Italy’s Officina Farmaceutica Italiana, Thailand’s Lotus Arts de Vivre and French company Decathlon Sports had sent their proposals for India foray around December-January, some others came before that.
Since January 2012 when the government notified 100% FDI in single brand retail up from 51% earlier, at least 12 proposals have come in. Of these, Swedish furniture major IKEA, UK-based footwear company Pavers and US’s fashion brand Fossil sought to come on their own with 100% FDI.
The other foreign single brand players—American clothing brand Brooks Brothers and Italian jewellery company Damiani — will operate in India with local partners. French cookware manufacturer Le Creuset also wants to set up stores in India.
Although permission for foreign investment in multi-brand retail was seen to have much greater potential, no international player has filed any application yet in this category. Multi-brand giants such as Walmart, Carrefour and Tesco have been in India in the cash-and-carry or wholesale format, which has allowed up to 100% FDI for several years. All three want to set up front-end multi-brand stores in India.
