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Wednesday, 07 September 2011 |
The proposed 51 per cent FDI in multi-brand retailing poses no fears for men’s wear brand Turtle.
The brand feels it’s good to have competition from foreign brands like Tommy Hilfiger and Zara since the presence of high-end foreign players in the multi-brand retail sector would push up demand, which would benefit smaller players as well. Since Turtle prices are between Rs 1,000 and 1,500, which are much lower than the prices of foreign brands and at the entry level of the premium segment, it doesn’t think there will be much direct competition. India has already allowed FDI up to 51 per cent in single brand retail and 100 per cent FDI in wholesale trading.
However, the possibility is that the Indian government could take several months before it gives the green signal to FDI in multi-brand retail, allowing global chains to open stores in the country. The Committee of Secretaries approval, which is yet to go to the Cabinet for its consideration, was given with several caveats. These included a minimum FDI of $100 million for large format retail operations, which will be allowed only in cities with a minimum one million population. It also suggested that 50 per cent of FDI component has to be deployed in the back-end infrastructure, like warehousing and cold storage. Turtle has 50 EBOs, out of which four are in Orissa (three in Bhubaneswar and one in Cuttack). Further the brand’s expansion plans include opening EBOs in Rourkela, Sambalpur and Behrampur. |
