UK-based footwear firm Pavers, which sells
premium leather footwear under the Pavers England brand, has become the first foreign retailer to seek government approval to operate without a local partner. This after the government allowed 100 per cent foreign investment in single-brand retail. Pavers approached the Foreign Investment Promotion Board (FIPB), the nodal agency that clears foreign investment in India, with a proposal to invest $20 million (Rs 106 crores) in the country through its joint venture with London-based Foresight Group.
Pavers had formed a joint venture with Foresight Group, a $500 million diversified group, in 2008 to explore the growth opportunities in India. The venture floated a wholesale operation in the country and appointed Triton Retail as a master franchisee to sell its range of men’s and women’s shoes and accessories in the country. Pavers England has been sourcing almost 40 per cent of its brand requirements from India and the rest from Vietnam, Italy and China. Pavers with Rs 55 crores in revenues last year expects to make profits by 2013-14. The plan is to go in for an IPO in 2016. The brand has expanded its portfolio from men’s and women’s footwear to ladies bags, belts and other accessories.
Once it gets clearance from FIPB to open its own stores, Pavers is expected to consolidate its franchisee operations. The Indian government allowed 100 per cent foreign investment in single brand retail in November last year. Prior to that, foreign holding in single brand retail was capped at 51 per cent. However, the policy that came into effect from January didn’t get the expected response due to the 30 per cent mandatory local sourcing from SMEs clause. This clause will become applicable if foreign investments in Indian companies go beyond 51 per cent.