23.11.12

Le Creuset


French cookware maker Le Creuset has proposed to start a fully owned single brand retail venture in India, becoming the fourth multinational retailer to do so after the country allowed 100% foreign ownership in single-brand retail in January.
Le Creuset, best known for its coloured castiron casseroles and saucepans, has agreed to the 30% mandatory local sourcing conditions as it already sources from Indian suppliers, a person aware of the development said. The company operates a cash-and-carry business in the country and opened a franchisee retail store in Bangalore this year.
Once it gets clearance from the Department of Industrial Promotion and Policy (DIPP), Le Creuset India Pvt Ltd plans to open company owned outlets, shop-in-shops in hypermarkets and department stores, and push franchisees to grow faster in India, the person said.
Le Creuset is only the fourth overseas company to apply for 100% FDI in the single brand retailing after UK-based shoemaker Pavers England, US-based accessories retailer Fossil Inc and Swedish furniture and homeware maker IKEA.
The lukewarm response to the policy initiative is mostly attributed to tough riders such as mandatory sourcing of 30% items from local small and medium vendors. In recent months, the government sugarcoated the pitch by changing the norm of mandatory sourcing from local SMEs from “compulsory” to “preferably”.
Some potential investors have sought further clarification on this. Clasis Law, a law firm facilitating the entry of single-brand retailers such as Massimo Dutti and Promod in the country, recently wrote to the DIPP seeking further clarification on whether a foreign company's global centralised base that sources from India would qualify as the mandatory local sourcing.
The policy says a company registered in India and receiving FDI should source products from the country.
Le Creuset’s cookware is sold in about 60 countries including the US, UK, Japan, Australia, South Africa and dozens of other nations.

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