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
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 likeAmazon.in, 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.