DLF Brands likely to lose Mango franchise

Mango is looking to consolidate its operations in India with its other partner Major Brands India, say people in the know


DLF Brands had acquired the franchise for Mango in 2011 with an agreement to expand and open new stores in India.
DLF Brands had acquired the franchise for Mango in 2011 with an agreement to expand and open new stores in India.

Mumbai: DLF Brands, the retail arm of real estate firm DLF Ltd, may lose the franchise for Spanish fashion brand Mango, which is looking to consolidate its operations in India with its other partner Major Brands India Pvt. Ltd, three people aware of the development said.

DLF Brands had acquired the franchise for Mango in 2011 with an agreement to expand and open new stores in India. In the past five years, it has opened nine stores in the country. Mango has been present in the country since 2001 with Major Brands, which also has nine stores.

“DLF has been slow on ramping up and this has caused Mango to review the partnership,” one of the three people cited above said, adding that after consolidation, Major Brands is expected to double the store count in two-three years.

An email sent to Timmy Sarna, managing director of DLF Brands, on Friday went unanswered. Major Brands did not comment on the developments either.

In July, Aditya Birla Fashion and Retail Ltd acquired the global clothing brand Forever 21 in the Indian market from DLF Brands for $26 million (around Rs175.52 crore).

“This business is growing at 30-40% per annum,” said Pranab Barua, business director (retail & apparel) at Aditya Birla Group in an interview with Mint in July. He added that by 2020, the brand will have revenues of Rs1,000 crore, up from Rs250 crore at the time of acquisition.

In September 2015, Ahmedabad-based apparel maker Arvind Ltd took over the franchise of Sephora, part of French luxury conglomerate LVMH Moet Hennessy Louis Vuitton, from DLF Brands. Since then, Arvind Brands has more than doubled the number of stores.

“There were four stores when we acquired the franchise and now, we have added four more, and by the end of the financial year, will add six more stores,” said Vivek Bali, business director, India, Sephora for Arvind Lifestyle Brands. 

“Mango is keen on higher growth here as global brands are doing well in India,” said a second person, while explaining that the shift in strategy will see Mango work much more closely with its Indian partners to grow in the market.

In 2014, DLF Brands also scaled down its footprint of Boggi Milano, a premium Italian menswear brand, closing stores in Mumbai and Bengaluru, Mint had reported then.

Earlier in 2012, DLF Brands had exited its joint ventures with Italian fashion houses Giorgio Armani and Salvatore Ferragamo and had said at the time that the luxury business was not scalable in India.

According to experts, DLF Brands may eventually exit from all its retail partnerships with the exception of Mothercare. The company has in its portfolio brands such as DKNY, Mango, Sunglass Hut and Claire’s.

“DLF is making a choice to not invest in these businesses. It looks like they will exit from the retail business with the exception of the Mothercare business which is thriving,” said Harminder Sahni, founder and MD of Wazir Advisors, a retail and consumer consulting firm.

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