Italian lifestyle denim maker Fashion Box SpA, owners of Replay Jeans, is exploring new partnerships to rejig its retail as well as sourcing operations in India. The three-decade-old Italian firm could forge a sourcing joint venture to tap the Indian market more effectively for its value added garmenting needs, and also look out for a similar deal or distribution pact intended to revive Replay’s retail presence in the country, said sources familair with the development.
The entry of a new majority stakeholder in the parent Fashion Box is spurring fresh activity for Replay in key emerging markets like India. Entrepreneur investor Matteo Sinigaglia and family acquired 60% stake in Fashion Box from its founding promoter Claudio Buziol after one of Italy’s better know denim brands, like some of its other peers, faced turbulance in recent past. The parent’s annualized turnover was estimated at around 250 million euros couple of years back, while its latest numbers could not be ascertained.
Replay, which had a distribution deal with Pantaloon Retail, retreated from the domestic market with the local partner corking expansion plans in a slowing economy.
“As you may know, recently Fashion Box has been acquired by two Italian brothers, Matteo and Massimo Sinigaglia. Certainly our major task, on a short notice, is to renew and update the Replay brand awarness. This we consider the base, to start the reorganization and revitalization of our business activities (in Europe and Asia). Of course India will be one of our main steps within this plan for both production and distribution. For the time being I am not in the position where, when and the partner identity we are looking for,” Giovanni Manzoni, Director General Area Operations, Fashion Box, told VCCircle in an emailed response to a query.
The Italian fashion house currently has marginal indirect sourcing from India, but plans to make a direct entry through a joint venture with a small sourcing specialist. This is part of Replay’s move to ramp up its annual sourcing from the country to $10-12 million in the immediate future, sources said.
In 2008, Replay had started selling its heavily washed denim jeans range in India priced between Rs 5,000 and Rs 8,000 through standalone stores. At the time, Pantaloon Retail was quoted by media on its intent to invest $6-8 million to develop the brand in India even though these plans went awry with the economic situation started worsening.
It is not clear whether Pantaloon would be interested in a new deal with Replay. Incidentally, Grotto SpA, another Italian denim rival and makers of Gas Jeans, is believed to be re-negotiating a deal with Raymond after it announced snapping of ties and closure of stores sometime back. This source-based information could not be independently confirmed at the time of posting this report.
A few weeks back, VCCircle reported that Spain-headquartered Pepe Jeans was in discussions to script a new deal in India. Pepe was one of the first international denim brands to enter India and has operational business around Rs 250 crore currently. In contrast, Replay and Gas, which are priced significantly higher in retail, are still tentative names in the local market and require continued investments going forward. The upside, though, remains the fact that India is a strong growth market with robust consumer spending where clothing’s share of wallet, which is under 5% now, will climb up.