Pepe Jeans & Dol­lar In­dus­tries

Pepe Jeans Europe BV has re­cently en­tered into a Joint Ven­ture with hosiery ma­jor Dol­lar In­dus­tries Ltd., with which both the com­pa­nies aim to ex­pand their mar­ket lead­er­ship in the ap­parel seg­ment of the coun­try. The Joint Ven­ture Com­pany is to man­u­fac­tur

VM&RD - - Contents - Nabamita Chat­ter­jee

What is the rea­son be­hind se­lect­ing Dol­lar In­dus­tries for such a busi­ness tie-up? Kavin­dra Mishra: Pepe Jeans’s ex­pan­sion into newer cat­e­gories is a strate­gic pro­gres­sion of the brand. Our ob­jec­tive was to part­ner with a great In­dian brand with a strong dis­tri­bu­tion and pro­duc­tion set up. Dol­lar In­dus­tries Lim­ited is a fore­most name in the in­ner­wear mar­ket and an­other rea­son be­ing, the in­ner­wear cat­e­gory is a high growth cat­e­gory in the ap­parel mar­ket. With higher dis­cre­tionary spend­ing and grow­ing fash­ion con­scious­ness, this seg­ment will con­tinue to grow ex­po­nen­tially. How­ever we be­lieve that at present there is a gap in the mar­ket, and there­fore im­mense po­ten­tial for a strong in­no­va­tive pre­mium in­ner­wear brand.

How is the in­vest­ment planned for the JV and the growth prospects like?

Vinod Gupta : Both the JV part­ners i.e. Dol­lar In­dus­tries and Pepe Jeans will hold 50% stake in the JV Com­pany. The to­tal in­vest­ment is out­lined around INR 200 crores in next 4-5 years of time. Out of 200 crores, 72 crores will be of our brand eq­uity from each com­pany hav­ing 36 crores and rest will be in tie ups with fi­nan­cial in­sti­tutes. We have an ex­clu­sive li­cens­ing agree­ment with Pepe Jeans and it is pri­mar­ily for 10 years with a de­cree of re­newal of an­other 10 years. Till March 2018, it will be in the stage of set­ting up the op­er­a­tions and thus we have ear­marked a profit of Rs 60 crore in the first fis­cal which will be 18-19 and from there on it is an­tic­i­pated to be of Rs.600 crores.

What re­tail chan­nels will be uti­lized in pro­mot­ing the pre­mium in­ner­wear cat­e­gory prod­ucts line? Kavin­dra Mishra Man­ag­ing Di­rec­tor, Pepe Jeans In­dia Vinod Ku­mar Gupta, Man­ag­ing Di­rec­tor, Dol­lar In­dus­tries

Kavin­dra Mishra : The in­ner­wear prod­uct cat­e­gory line will be re­tailed through our re­tail stores, our LFS medium-Shop­pers Stop, Life­style, Cen­tral, Pan­taloons and on­line plat­forms likeA­ma­, Myn­tra, Jabong, Ajio and Flip­kart.

Vinod Gupta : Along with the re­tail net­work of Pepe Jeans we will ag­gres­sively uti­lize our trade mar­ket­ing chan­nels of Dol­lar In­dus­tries. We have 1850 dis­trib­u­tors pan In­dia and are tied up with 80,000 MBO’s and ev­ery year we are adding not less than 10% in our trade chan­nels, so this en­tire net­work is go­ing to help us po­si­tion the pre­mium brands ef­fec­tively. We have great hopes from this JV and we feel that be­cause there is a 50-50 eq­uity the par­ent com­pany will be very much in­ter­ested in de­vel­op­ing the brand in this mar­ket un­like many other for­eign brands who all have en­tered In­dia through li­cens­ing model.

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