Economic Times: March, 2016
New Delhi: While GAS, Italy's leading premium apparel and denim brand has approached the Foreign Investment Promotion Board (FIPB) for a joint venture arrangement with Reliance Brands with which it currently has a master franchisee arrangement, its global CEO Enrico Acciai says the relationship is already pretty much on the lines of a joint venture. In an exclusive interview to ET, Acciai spoke about the Indian market and expansion plans here, and the e commerce boom in the country, which will lead them to focus more strongly on online channels here. Edited excerpts:
How has the partnership with reliance brands evolved?
Enrico Acciai: Business with Reliance Brands is in the phase where we are asking the FIPB to allow us to set up a joint venture, although I feel we're already operating in this fashion. We have a fantastic relationship with Reliance Brands. They have the same vision as us and it's a relationship that I appreciate.
How is the business faring?
Enrico Acciai: Italy is the headquarters of the company or the heart of the company in terms of creativity and international strategy. We are a 100 million Euros company in terms of turnover and what is important to note is that the company has matured in a sense that while the vision is central in terms of corporate strategy, we have been able to adapt in a domestic manner in countries where there is reasonable business. . This company has 55% of its business interests in retail and about 45% in wholesale. This includes e commerce which is about 7-8% of our business. Over time we have created more brand awareness and the brand has grown significantly with a network of more than 150 stores across the world.
What are your expansion plans here? Would you look at expanding through online channels and in tier -2, tier-3 locations?
Enrico Acciai: Currently we operate through our 17 mono brand stores, around 50 shop in shops and our partnerships with four e commerce companies here. In the next 18 months, we plan to double the number of points of sales. This means the mono brand stores as well as the shop in shops. India is becoming interesting for us. While we are strong in Europe, in countries like Italy and Spain, India is a strategic market for us alongside other markets like Japan and Russia. We have seen some statistics on e commerce and they are pretty impressive. It is booming because probably the infrastructure is not sufficient. It's an easy way to get in touch with the brand by selling online. We have started with four e commerce partners and more and more energy will be dedicated towards this channel. It is work in progress, and we're studying them in order to be more efficient. Expansion to tier, 2 tier 3 locations has been the subject of long conversations. We are absolutely interested in these locations and are developing the strategy for being here. We have to work on merchandising and collections that allow customers to get familiar with the brand, by selecting certain merchandise that's more adequate for those cities. The culture is so diverse here. India is an inspiration and an important influence for global customers. Our chairman and founder senses a lot of potential in India.
The government has laid a lot of emphasis on manufacturing in India. Any plans of manufacturing here?
Enrico Acciai: We already source merchandise through different vendors here and about 20% of our global merchandise is sourced from India. The more we will grow, the more we will be attracted to produce externally for international markets. We already work with various sites and different vendors here.