Levi Strauss Seeks Nod for Di­rect Re­tail

Co lat­est among global brands seek­ing to set up own stores

The Economic Times - - Business Of Brands - Shamb­havi.Anand @times­group.com

New Delhi: Levi Strauss & Co, the maker of the pop­u­lar Levi’s denim jeans, has sought the gov­ern­ment’s per­mis­sion for con­vert­ing its ex­ist­ing lo­cal whole­sale en­ti­ties into re­tail, join­ing a list of for­eign brands that are seek­ing to gain from pol­icy lib­er­al­i­sa­tion in Asia’s No. 3 econ­omy. The US-head­quar­tered com­pany had, on April 11, filed an ap­pli­ca­tion with the De­part­ment of In­dus­trial Pol­icy & Pro­mo­tion (DIPP), the no­dal agency for for­eign di­rect in­vest­ment in In­dia, seek­ing ap­proval for its ex­ist­ing whole­sale en­ti­ties to en­gage in di­rect re­tail­ing and ecom­merce, ac­cord­ing the agency's web­site.

Sev­eral ap­parel and ca­sual wear brands such as Pepe Jeans, Adi­das and Puma have al­ready ap­plied for sim­i­lar per­mis­sions. While Pepe is look­ing at set­ting up large for­mat, com­pa­ny­owned stores, Puma plans to op­er­ate its own ecom­merce por­tal.

Levi Strauss & Co did not im­me­di­ately re­spond to ET's emailed query on the mat­ter.

Although In­dian reg­u­la­tions al­lowed sin­gle-brand re­tail­ers to set up their own stores, such com­pa­nies had to set up whole­sale sub­sidiaries to sup­ply to their chain of fran­chisees. That made things cum­ber­some as com­pa­nies had to set up sep­a­rate en­ti­ties for re­tail and whole­sale, with dif­fer­ent ware­hous­ing, in­ven­tory and ac­count­ing.

In Novem­ber 2015, for the first time the gov­ern­ment re­laxed the rules for FDI in re­tail, per­mit­ting man­u­fac­tur­ers to sell their prod­ucts through whole­sale, re­tail and ecom­merce chan­nel as well. “It has been de­cided that a man­u­fac­turer will be per­mit­ted to sell its prod­uct through whole­sale and/or re­tail, in­clud­ing through e-com­merce with­out gov­ern­ment ap­proval,” the DIPP said at the time.

Ac­cord­ing to re­tail­ers, the pol­icy change will help stream­line busi­ness oper­a­tions by bring­ing ef­fi­ciency in sup­ply chain, in­ven­tory man­age­ment, sourc­ing and gen­er­at­ing em­ploy­ment in re­tail in­dus­try.

Govt had re­laxed the re­tail FDI pol­icy that now al­lows set­ting up of own stores in ad­di­tion to fran­chisee out­lets

FILE PHOTO

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