India: JV established between Canali and Genesis Luxury Fashion

Canali and Genesis Luxury Fashion Together in the Indian Market: In detail, Canali, a historic Italian brand in luxury menswear, has signed a Joint Venture agreement with its franchise Indian company Genesis Luxury Fashion. The Italian company will hold a 51% stake in the firm.

Although Canali had the option of establishing a subsidiary, in light of the government’s recent decision to allow 100% foreign direct investment in the retail sale of single-brand products, the company decided to form a joint venture with an Indian firm. This choice was dictated by the fact that, again in accordance with the new law, foreign companies entering India must source at least 30% of their supplies from Indian SMEs and micro-enterprises (the term “Indian SMEs” refers to those whose investment in machinery and production units does not exceed $1 million): such an arrangement would not have met Canali’s needs, given the high quality of its products and the fact that its production takes place entirely in Italy.

At present, the agreement is awaiting government approval. In any case, this is a very significant initiative, as Canali is the first luxury brand to invest in India following the new reform. There are currently five Canali stores in that market managed by Genesis, a franchise operator for several international luxury brands. These brands are watching the evolution of the Indian market with growing interest, as the sector is growing at an average annual rate of 20%, and turnover is expected to reach $14.7 billion by 2015, up from the current $5.8 billion.

ALSO READ:

The success of Italian companies in India

Internationalizing your business abroad: strategic choice or opportunity?

Digital export manager (DEM): internationalization in a digital context