Tommy Hilfiger to increase retail presence in India

American apparel-maker Tommy Hilfiger 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 its 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 turnover of Rs 80 crores for the fiscal 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. 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.

Both partners will invest Rs 15 crores each, whilst Rs 30 crores will come from the company’s internal accruals, the alliance said in its application to DIPP. “Engaging in retail operations directly would enable the applicant company to set up retail stores in locations all over the country including in those which at present are found commercially unfeasible by our franchisee partners,” the application said.

About a year ago, Tommy Hilfiger had bought out the 50 per cent stake of the Murjani group in a joint venture called Arvind Murjani Brands, which owned the franchisee rights for the American brand in India. The Murjani Group held the Tommy Hilfiger trademark licence in India. In 2011, the JV applied to the Registrar of Companies for a change of name from Arvind Murjani Brands to Tommy Hilfiger Arvind Fashion with an authorized share capital of Rs 20 crores.