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Retail buzz gets louder as global labels check in

Within a fortnight of the government allowing 51 per cent FDI (foreign direct investment) in retail, global brands have started making a beeline for Indian shores.

From the Italian coffee retail chain Costa to Hong Kong-based lifestyle store A S Watson and French beauty salon chain Jean Claude Biguine and New York-based jewellery chain Verigold, Indian retail seems to have become the flavour of the month.

Right on the heels of the Hong Kong-based A S Watson, a health and beauty chain, announcing its intention of investing in India, the French beauty salon chain which has tie-ups with the major beauty and hair brands such as L’Oreal, Elle, Bache, Pevonia, Philips and Eugene Perma, also announced plans of investing Rs 200 crore in the next two years in India.

The company is planning to set 500 outlets across the country with 60 per cent of them in the tier 2 cities. It is hoping for a Rs 90 crore return on investment by 2010.

Costa, the Italian coffee brand, which competes with Starbucks of the US in European markets, is expected to invest around Rs 100 crore initially, according to market sources.

Jewellery brand Verigold, which has manufacturing facilities in India, is looking at investing Rs 100 crore in the next one year.

According to industry sources, the $ 180 million jewellery retail chain is planning to get into the home furnishing market, with two formats - a one-stop shop for home improvement facilities and building materials and an electronics store. The rollout will initially be in Kolkata, Bangalore and Pune.

According to industry sources, A S Watson which is a part of the Hong Kong-based Hutchison Whampoa group, is likely to invest in a cash and carry model. German Shoprite and the South African Metro are already present in this segment.

Market analysts, however, caution that these are early days yet and that the announcements may not translate into actual investments.

“Right now, everybody is coming here to scout. In most cases, plans are yet to be firmed up,” said an analyst. But investment in the range of $200-$500 million can be expected in the next few months,” said an analyst.

If foreign brands are checking out Indian opportunities, then Indian brands are not far behind checking out foreign shores. Led by established brands in the fashion and jewellery segments, Indian brands are making forays abroad, especially in the Middle East.

Fashion label Satya Paul is eyeing the Middle East markets. Hide Design, the designer leather brand, is also eyeing the opportunities in the Middle East as is the south-based home furnishings brand Atmosphere.

Sanjay Kapoor, chief executive officer of Genesis Colours, which manages the Satya Paul brand, said, “We are looking at setting up an outlet in Dubai by the end of the year.”


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