Bangalore: Shopping for a two-buttoned, Hart Schaffner Marx suit, the brand that US President Barack Obama wore for his inaugural ball earlier this year, or a Pierre Cardin shirt in India may remain a distant dream, yet.
Chicago-based clothier Hartmarx Corp. had signed a deal with Arvind Ltd last May to bring multiple brands into the country, but has since filed for bankruptcy. The Ahmedabad, Gujarat-based textile maker is now waiting for a new owner to take over Hartmarx.
Under the licensing agreement with the US firm, Arvind holds exclusive rights to market, retail and distribute in India Hart Schaffner Marx suits, Sansabelt trousers and Pierre Cardin, the popular clothing and accessories brand.
“While the long-term agreement still stands, the bankruptcy of Hartmarx has stalled our plans to launch the brands soon. We have decided to wait for the company to be taken over following its bankruptcy,” J. Suresh, CEO of both Arvind’s brands and retail divisions, told Mint. “There was a business plan for the first three years, but now with the parent company not in sound condition, we are not in a hurry.”
As per the deal, there were to be 135 Hart Schaffner, 260 Pierre Cardin and 400 Sansabelt retail points in India, through exclusive outlets as well as multi-branded department stores. Suresh did not disclose the financial terms of the agreement.
“Typically, licensing agreements are signed for a certain period where the international company demands a royalty fee from the local firm, which in turn handles the brand positioning along with the logistics and marketing side of it,” said Ashish Dhir, associate vice-president, Technopak Advisors Pvt. Ltd, a retail advisory.
“Many global brands such as Marks & Spencers, Gas, Mother Care are available here through licensing deals with local companies.”
Arvind’s other licensing deals stay unaffected. In two weeks, the firm is set to launch the US Polo sportswear brand in India, some two years after it signed a deal with the US Polo Association.
The firm on 1 April split its brands and retail divisions, bringing all its brands under Arvind Lifestyle Brands and its Megamart stores under Arvind Retail. The two businesses will function as separate, wholly owned subsidiaries of Arvind Ltd. “The objective is that the subsidiaries function independently and are funded separately,” said Suresh.
After setting up nearly 130 Megamart stores, Arvind is looking at expanding the chain by another 25-30 small-format stores this year.