Zara Group's Massimo Dutti set to check in

Foreign Investment Promotion Board to decide next week on the brand's application, proposed to be launched with Tata's Trent

International fashion brand Massimo Dutti is expected to set up stores in India soon.

The proposal of the brand from Spain’s Zara stable is listed for the Foreign Investment Promotion Board (FIPB) meeting next Tuesday.

The application has been made by Grupo Massimo Dutti SA, which operates as a subsidiary of the euro 13.8-billion Spanish retail chain Industria de Diseno Textil SA (Inditex), which owns the Zara and Massimo Dutti brands, among others.

In 2011, Inditex had announced a joint venture with Tata’s Trent to launch Massimo Dutti stores in India  but the plan ran into hurdles over brand ownership norms.

FIPB, a key wing in the finance ministry that vets foreign investment applications, had rejected the group’s proposal to open Massimo Dutti stores in India in June 2012, citing violation of a rule framed by the department of industrial policy and promotion (DIPP), which says an investor must own the brand it is proposing to bring to India.

Last year, in the case of Massimo Dutti, the application was made by Zara Holdings Netherlands.

Subsequently, the government relaxed the norms on brand ownership requirement.

According to the current policy, the investor entity should have a legally tenable licence agreement with the brand owner.

An email questionnaire sent to the Inditex group did not elicit a response. Trent executives could not be contacted for comments.

Inditex already has its flagship Zara stores in India through a 51:49 joint venture with Trent.

Inditex, which has over 5,600 stores in eight formats around the world, had signed an agreement with the Tata group in February 2009 to form the joint venture to launch Zara outlets in India and opened the first store in 2010.

Currently, there are Zara outlets across Mumbai, Pune, Bangalore and Delhi.

Globally, the eight formats that Inditex operates are Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque. Massimo Dutti had 573 stores across 50 countries as of the end-2011.