Reliance Brands, a part of Reliance Industries Limited (RIL), the largest private sector company in India, has signed an equal joint venture partnership with Iconix Brand Group to acquire the ownership and management rights of 20 international lifestyle brands for India. Nasdaq-listed Iconix Brand has in its portfolio big names like Ed Hardy, Mossimo, London Fog, Ecko and Candie's. These are largely fashion apparel, home decor and electronics brands with a combined retail revenue of $12 billion globally.
The partnership marks the next step in the global expansion strategy for Iconix, which currently has similar partnerships in Greater China, Europe and Latin America. According to a press release from the company the new joint venture, which will be based in Mumbai, will follow a similar business model to that of Iconix in North America, which focuses on growing royalty revenue through existing and new licensing agreements with both manufacturers and retailers, while providing marketing and brand management services. Existing Iconix business in India with brands such as Mossimo and Ed Hardy will be also rolled into the partnership.
Reliance Brands will buy 50 per cent stake in Iconix India, a newly created subsidiary of the US parent founded by Neil Cole. Reliance may use the Iconix JV to acquire or invest on Indian fashion brands. Similarly, Iconix will transfer the Indian ownership of all future global acquisitions to the new JV. Darshan Mehta, CEO, Reliance Brands points out that the India ownership of the brands is vested with the joint venture company for perpetuity. Other prominent brands that are part of the JV include: Mudd, Candie's Rocawear, Rampage, Danskin, Charisma, Sharper Image. Iconix also has joint ownership of seven global brands, including Material Girl (with singer Madonna), which will become part of the JV in due course. The JV will keep the brand management, marketing and business development duties for all the brands. Mehta says they plan to build exclusive long term licensing deals with local retailers for each of these brands. The retailer will manage the stores, inventory and the operations. The new partnership is subject to regulatory approval, the release added.
Experts say the deal provides Reliance a significant position in India's expanding lifestyle retail industry. This is possibly the biggest investment in fashion by a large Indian corporate after Aditya Birla's acquisition of Madura Garments more than a decade ago. Reliance Brands began operations in October 2007 with a mandate to launch and build international and domestic brand equity in the premium to luxury segment across apparel, footwear and lifestyle business. Its current portfolio of brand partnerships comprises of Diesel, Ermenegildo Zegna, Hamley's, Kenneth Cole, Paul & Shark, Quiksilver, Roxy, Steve Madden and Timberland.