Inditex reapplies to FIPB for Massimo Dutti's India foray

Massimo Dutti, the upmarket fashion brand from

Inditex, has once again made an application to the Foreign Investment Promotion Board (FIPB) to invest 1.5 million euros (about Rs 10 crores) over two years to open five Massimo Dutti stores in India. The stores will be opened through a 51:49 JV with the Tata Group. The company expects to get through this time around by working out a solution to government officials’ objection over ownership of the brand.

Early last year, Massimo Dutti had applied for a 51:49 joint venture with the Tata Group through Zara Holdings BV, the flagship unit of Inditex Group. FIPB rejected the proposal stating it did not meet India’s single brand retailing investment norm that mandated its original owner bring in the brand to the country.

After Zara, the world's favourite fast-fashion brand known for its ability to take a new style from design table to dressing room in a matter of weeks, made a splash ever since it opened its first store in May 2010, Mossimo Dutti too wants to attarck eyeballs. Zara, which is in the country through a similar partnership between Inditex and Tata, has made profits in two out of its three years in India. Last fiscal it made a profit of Rs 38 crores on revenues of Rs 259 crores.

Inditex operates more than 6,000 stores in 86 countries across eight formats including Zara, Massimo Dutti, Pull & Bear and Uterque. Despite the global slowdown the fashion retailer clocked 16 per cent year-on-year jump in its net sales for fiscal year 2012 at 16 billion (Rs 8,69,200 crores) and 22 per cent rise in net profit of 2.4 billion (about Rs 13,000 crores).