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Abercrombie, Gap may plan shops in India

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A team from Abercrombie & Fitch, a prominent American clothing chain, was in India recently to explore setting up shop in the country, according to a top executive of a consultancy firm.

Gap, another big brand from the US, is learnt to have stepped up enquiries about the Indian market after the government recently allowed up to 100 per cent foreign direct investment in single brand retail.

“We are not in a position to comment specifically about expansion into India. We can tell you that we are constantly evaluating new opportunities for our brands, including new countries, for expansion,” according to an Abercrombie & Fitch spokesperson. A questionnaire sent to Gap remained unanswered.

In Asia, the only places where Abercrombie’s flagship stores are located are Singapore, Japan and Hong Kong. The $3.4-billion, Ohio-based chain has a little over 1,000 stores across the US, Canada, the UK, Europe and Asia. It also operates offshoot brands like Hollister and Gilly Hicks.

Gap, a $14.7-billion, San Francisco-based chain, is surveying the India market and looking for the best time to launch its first store here, it is learnt. Executives from Gap have met Indian real estate developers, as well as retailers for a feel of the market. Gap operates flagship stores in the US, Canada, UK, France, Ireland, Korea, Japan, and China. It also has franchisee agreements with other companies to operate Gap or Banana Republic stores in the Philippines, Singapore, Malaysia, UAE, Korea, Kuwait, Qatar, Bahrain, Oman, Saudi Arabia, Cambodia, Indonesia and Mexico. The group has a little over 3,000 stores.

Other global retailers such as Swedish furniture major Ikea, the UK’s Arcadia group and American coffee brand Starbucks are reported to be giving finishing touches to their India plans.

Jaideep Wahi, director, retail services, Cushman & Wakefield, a global consultancy firm, said the company released a research paper for international players a few days earlier on the Indian retail market. This was in response to the interest shown by international chains following the government policy to raise the FDI limit from 51 to 100 per cent in the single brand category.

He says global chains are expected to decide on their India strategy either this year or the next. “Many of them have already done their rounds and others are making initial enquiries,” he said. However, the government move to keep in abeyance its decision of November 24 on 51 per cent FDI in multi-brand retail has been a spoiler and firms want to be sure before firming up their India plans, he said.

Samantak Das, national head of research at Knight Frank India (another global consultancy), agreed the government stand on putting multi-brand FDI under the carpet was a lost opportunity for the country. According to Das, the real action from global players can be expected only in about two years or so.

Recently, Anku Nath, director for trade policy advocacy at the US-India Business Council, had said the FDI rider on mandatory sourcing of 30 per cent from Indian small and medium industries also required some thought.

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