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, Genesis Luxury Fashion. The Italian company will hold 51% of the company's shares.

Although Canali had the option of setting up a subsidiary, based on the government's recent decision to allow 100% of Foreign Direct Investment in the retail sale of single-brand products, it was decided to opt for the establishment of a joint venture with an Indian company. This choice was dictated by the fact that, again according to the provisions of the new law, foreign companies entering India must source at least 30% from Indian SMEs and micro-enterprises (the term Indian SMEs refers to those whose investment in machinery and production units does not exceed US$1 million): such an operation would not have coincided with Canali's needs, given the high quality of its products and the fact that its production takes place entirely in Italy.

At present, the deal is awaiting government approval. In any case, this is a very important initiative, since Canali is the first luxury brand to invest in India after the new reform. There are currently already five Canali stores within that market managed by Genesis, a franchise that operates for several international brands operating in the luxury sector. The latter are watching with increasing interest the evolution of the Indian market, as the sector grows at an average of 20% annually and is expected to reach USD 14.7 billion in turnover by 2015, up from USD 5.8 billion currently.

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