Pakistani retail chain Sefam plans big India move

The largest fashion retail chain in Pakistan, Sefam, is chalking out aggressive expansion plans in India, soon after the government announced an in-principle nod to boosting foreign direct investment (FDI) flows from the neighbouring country. The company had set up its first store in New Delhi 12 years ago through the franchisee route, and it remains the only one in India from its stable so far.

Zain Aziz, international business head, Sefam, who was in the city for 'Lifestyle Pakistan Exhibition', told Business Standard that the company would roll out its expansion from the cities up in the fashion quotient — mainly Delhi and Mumbai. But since the luxury market in India is spreading beyond the big cities, Sefam is planning to enter tier-I and tier-II cities such as Chandigarh and Ludhiana too. Through franchisee model and also brand-owned stores across high streets and malls, the chain is looking at opening around 200 outlets by 2015, Sefam claimed.

But setting up 100 per cent owned outlets may still be a distant dream for the company, even when FDI is permitted from Pakistan. This is because of the sourcing conditions attached to single brand retail FDI norms in India. At present, Sefam is not sourcing anything from India, admitted Aziz. The single brand retail rules, while hiking the FDI limit to 100 per cent from 51 per cent, have made it mandatory for foreign chains to source at least 30 per cent of the material used from India.

“We use a mix of in-house production, majorly,” said Aziz. However, he pointed out, “We are planning to set up an Indian fashion house, which would create products based on Indian fabrics and designs and sell it in Pakistan. We will surely be sourcing Indian fabric then.” So, initially, the company would expand taking the franchisee route. “We will look at opening flagship stores after setting up considerable number of franchisees, pan-India,” Aziz said.

The 27-year-old company has a range of eight brands, including its flagship 'Bareeze’. Apart from Pakistan, it has a retail presence in over six countries, including Norway, Canada, UAE, UK and Malaysia. It’s firming up plans to get into other geographies such as North America and Central Asia as well. Even as the company refused to share its financials, it’s eyeing 100 per cent growth (in revenue) from the India market over the next few years.

On whether any Indian retail chain was partnering with Sefam to have a substantial presence in Pakistan, Aziz said, “not yet”. He added that with initiatives of the government of India and Pakistan on deepening bilateral trade, “including a landmark decision to allow FDI from the western neighbour”, things could change. “New fashion line-ups between India and Pakistan could be in place soon with both countries mulling a fashion collaboration to open new avenues for designers in the fashion and textile industry. Therefore, we at Sefam are open to the idea,” he said.