i Develop Stocks Advisory

Arvind and Diesel sever JV agreement

The deal between Arvind and Diesel, involving the distribution and branding of Diesel products in India, has been cancelled after both companies decided that the agreement would restrict their future expansion plans in India.

The joint venture, Diesel Fashion India Arvind Pvt Ltd, was agreed on April 20, 2007 with Diesel holding a 51% stake with the rest held by Arvind. The plan was to open 15 exclusive Diesel stores in cities like Mumbai, Delhi, Bangalore, Chennai, Chandigarh and Hyderabad in the next three years.

The Arvind group of companies has been involved in a number of recent deals aimed at bringing European and American brands to the Indian retail market. In May, Arvind Brands, a division of Arvind Mills Ltd, signed a license agreement with the Hartmarx Corporation to bring a number of the Chicago-based company’s brands to India.

Under the terms of the agreement, Hartmax has tied up with Arvind to market and retail its own Hart Schaffner Marx and Sansabelt brands and, in cooperation with S.A.R.L. de Gestion Pierre Cardin, the licensed Pierre Cardin brand across the country.

As the demand for mid range apparel grows in India, Arvind is keen to secure a dominant position in India’s retail sector. And while the Diesel deal may not have been to both companies advantage, the Group is likely to be on the lookout for more potential tie-ups.