Tommy Hilfiger, Promod file for 51% FDI in single-brand retail

After Swedish furniture-maker IKEA, premium

clothing and accessory brands Tommy Hilfiger and Promod have filed proposals to the Department of Industrial Policy and Promotion (DIPP) for investing in single-brand retail in the country. According to reports, the American apparel-maker has decided to open 500 stores in India over the next five years to capitalize on the brand’s increasing popularity in the country. It has informed the Department of Industrial Policy and Promotion (DIPP), the nodal agency that clears such foreign investments that it is looking at increasing the footprint in India.

Tommy Hilfiger Arvind Fashion is bullish on India as the brand has shown “robust financial performance” over the years and clocked total sales of Rs 80 crores for the fiscal year ending March 2011. Revenue is expected to have swelled four times to Rs 320 crores for the fiscal year ended March 2012, the documents filed by the company to the DIPP said.

Tommy Hilfiger Arvind Fashion, a 50:50 joint venture between the US premium lifestyle brand and Ahmedabad-based Arvind will invest Rs 60 crores in 45 company-owned stores; a significant number of the stores will be opened through franchisees, according to a foreign investment application filed by the company. Currently, Tommy Hilfiger operates 58 franchise outlets and over 60 shop-in-shops in other department stores. The expansion will take Tommy Hilfiger’s presence to 631 points of sale by 2016-17.

According to DIPP, French fashion brand Promod SAS has also filed for a 51 per cent stake in a joint venture with local Modex Trading. Modex is co-owned by Tushar Ved, the promoter of Major Brands, which currently owns Promod’s franchisee rights in India.