The joint venture of Italy’s Grotto SpA and India’s Raymond Ltd is awaiting a clearance from India’s foreign investment promotion board (FIPB) to roll out a chain of retail stores that will sell the former’s Gas brand of apparel and accessories.
Meanwhile, Raymond has gone ahead and launched the first Gas outlet in India, in New Delhi’s central business and shopping district Connaught Place.
Pradeep Bhandari, group president, Raymond, said this was a franchisee outlet and added that Raymond plans to open another store in Mumbai, through a similar arrangement, later this week.
In November 2006, Grotto and Raymond signed an agreement to create a 50:50 joint venture that would invest Rs50 crore over three years to open more than 90 Gas stores.
The two companies say they are targeting India’s “cosmopolitan, international and trend-conscious” youth segment aged between 18 and 35.
The joint venture hopes to reach a turnover of Rs200 crore in the next three years.
“A demographic change is happening in India at present and the 18-35 years segment is becoming extremely important,” said Bhandari.
In February, the Grotto-Raymond joint venture had applied to the FIPB for a clearance, but the government agency that clears overseas investment into India is yet to approve the joint-venture case.
India’s foreign investment norms currently allow 51% foreign investment in single-brand retail.