INDIA BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...

FENDI TO OPEN SHOP IN INDIA

 To whet the appetite of the fashion-conscious elite in India, ultra-premium luxury brand Fendi is landing here. The French boutique brand is setting up a joint venture through the recently introduced window for FDI in single-brand retail. The joint venture would retail its global range, including fur products, through a chain of outlets spread across the country.

   Fendi has tied up with Fun Fashion India for joint venture. The local partner will have 49% stake in the joint venture while the French group will hold 51% equity. The Louis Vuitton and Moet Henessey (LVMH) Group, which owns Fendi, has applied to FIPB, for clearance to invest in India. Interestingly, approval has already been obtained for a separate joint venture for Louis Vuitton brand.

   LMVH plans to invest Euro 5,000,000 in India over the next five years. The French Group has indicated that it plans to study the Indian market and identify products that can be manufactured and then exported under its brand name. The Group recorded a profit of Euro 28.1 billion for the financial year ending December 2005.

   To begin with, Fendi products would be sold under the trademarks like Fendi, V, FF, FF Fendi and registered designs like Janus and Squirrel through an outlet in Mumbai. LMVH will sell ready to wear products, watches, accessories, jewellery and shoes. The local partner, FFI , is promoted by Chordia Fashion, a Mumbai-based concern.

   The Fendi application claims complete compliance with the Press Note 3 of 2006, which permits 51% FDI in single brand retail in India. Fendi has said that it will only sell products that will be branded during manufacturing and will be sold under a single brand name.

   It has also been specified that Fendi does not have an existing joint venture in India so far it does not need a ‘no objection certificate' as per Press Note of 2005. The luxury brands that have obtained green signal from FIPB so far include Louis Vuitton, United Colours of Bennetton and Nike shoes. A number of luxury brands like Hugo Boss and Mont Blanc have set up shop in India through the franchisee route and have thus not come under the radar of Press Note 3.