Q&A: Darshan Mehta, Reliance Brands

'Constrained by number of stores, not customers'

Reliance Brands, a unit of Mukesh Ambani's Reliance Industries, has brought in six international luxury and premium brands such as Diesel and Paul & Shark in the country, and opened 29 stores under these brands. In a chat with Raghavendra Kamath, Chief Executive Officer, Darshan Mehta discusses the company's performance and issues in high-end fashion segment. Edited excerpts:

VF Corporation has acquired Timberland in the US, and you are in a joint venture with Timberland. Do you expect the Arvind-VF joint venture to take over your operational part in Timberland? Are you exploring any three-way alliance between Timberland, Arvind-VF and Reliance?
We have nothing to do with Arvind-VF. We have a long-term distribution contract with Timberland Corporation whose new shareholders are VF Corporation. We will continue with our contract with Timberland.

As for the three-way alliance, we already have one. We have contract with Timberland whose new shareholders are VF Corporation.

According to RIL's annual report, Reliance Brands made losses of Rs 6.23 crore. When do you expect to break-even?
We don't want to talk anything beyond published information.

You will open 55 stores under various formats by the end of this year. What is the progress?
Currently, we have 29 stores. We have signed deals, and will achieve approximately those many stores by this year.

Given that inflation has crossed nine per cent and interest rates escalated, have they impacted your business?
Since the time we have opened our first store last April, we have not seen any dip in sales. Though June was a little weak, March to May was really good. We cater to people who do not manage their budgets; they are the affluent class. We are constrained by the number of stores we can open and not by the number of customers. In India, there is an absence of retail channels. For premium and luxury goods, there is only one channel-mono brand stores. We do not have e-commerce, department stores and multi-brand stores, which can sell these merchandise.

Are you planning to launch any new international brands in the country and which are the segments you are looking at?
We are talking to several brands, but these things take time. We are serious players and go for joint ventures and long-term contracts. At the same time, we are not compulsive or time-bound investors. When we sign a deal, we will announce it. Whatever we do, we will do it in style.

What happened to your plans to invest in Indian fashion brands?
We are talking to people. When time is right, we will do it.