When single brand companies are queuing to enter India, London-based Savile Row Co, known for its famed business suits and shirts, and Mumbai-based textile major Alok Industries are looking to end their 15-month partnership in India.
Savile Row has already started scouting for new partners in the country, it is learnt. Since Alok is looking at exiting all its retail ventures, both-Alok and Savile Row have mutually decided to end this agreement, said sources.
Incidentally, it was a second innings for Savile Row in the country after it ended a 30-year agreement with Forbes Brands, a unit of the Shapoorji Pallonji Group, in 2010 as Shapoorji wanted to get out of this segment.
In October 2011, Alok H&A, the retailing arm of Alok Industries, signed an exclusive production and distribution agreement with Savile Row to produce and distribute the former’s products in the country.
When contacted, Jeffrey Doltis, managing director, Savile Row, said: “Yes, that (ending the partnership) is correct. We are looking for other partners and T&A Consulting is helping us with the search.”
Doltis said Indian retail was tough at present. “I don’t think Indian partners are particularly difficult, but the retail market is very severe right now.”
India is an important market for the British brand as nearly two-third of its revenues comes from Asia. In fact, revenue from Japan was double that from its home market.
Though Alok managing director Dilip Jiwrajka could not be contacted for comments, sources in Alok said the agreement with Savile Row will come to an end automatically when they shut all H&A stores.
Alok has already closed 45 loss-making H&A stores of the 190 exclusive outlets it had. Alok is looking at exiting all its non-core areas such as retail and real estate, to reduce its debt burden.
“We have not opened any store for Savile Row, but if we close the H&A stores, this will also automatically end. We may also consider continuing with the agreement,” said a source from the company.
Doltis had earlier said India was one of the biggest markets for Savile Row. “We perceive India as the second-biggest market behind Japan, which is a super market for suits. But India is a big market for shirts,” Doltis had said in his previous interaction with Business Standard.
Doltis said the company was expecting a revenue of $2-3 million in the first year of operations and 20 per cent annual growth thereafter.
"Alok strength lies in manufacturing, which they have realised and not retail hence it makes sense for them to get out of the agreement," said Prashant Agarwal, joint managing director, Wazir Advisors.
