"Forever 21 has been looking to exit the JV with DLF for a while now. Apart from Madura, a couple of other offline retailers had also been approached before Myntra became the frontrunner," said a source.
As per reliable sources, Madura Fashion & Lifestyle has emerged as a contender to snag India rights for running physical stores of the American fast-fashion brand Forever 21. Talks with Madura comes at a time when e-commerce major Myntra has also engaged with the fashion retailer, but a deal is yet to be signed, reported TNN.
Forever 21, which directly competes with Zara and Sweden's H&M, has had an existing partnership with DLF Brands for the past three years, but is now looking for a more aggressive India play. Sources said that Aditya Birla group-owned Madura is pressing for the online rights of Forever 21 which are exclusively held by Myntra at present.
"There may have been some resistance by the Myntra board about taking the offline route. They are not sure running brick-and-mortar stores would be appropriate at this time as it would digress from their online-only strategy," a person close to the development said.
Myntra, which is owned by e-commerce biggie Flipkart, has an exclusive deal with Forever 21 to sell its products online here in India, which was inked last year in December.
Currently, Forever 21 operate a dozen retail stores here, according to its official website. "Forever 21 has been looking to exit the JV with DLF for a while now. Apart from Madura, a couple of other offline retailers had also been approached before Myntra became the frontrunner," said a source.
Madura's conversations with Forever 21 for the India rights may go either way. Another person privy to the ongoing deal-making talks said that Madura is actively chasing Forever 21 as it intends to bring the fashion brand onto its e-commerce platform Abof.com, which has been primarily focusing on large private brand. Abof, the fashion e-commerce portal launched by Aditya Birla group in October last year, competes with Myntra and Jabong, besides other online retailers.
"We are not aware of this development." Timmy Sarna, CEO at DLF Brands, did not respond to text messages, while a Myntra spokesperson said in an emailed response, "We do not comment on market speculation", said spokesperson of Aditya Birla Fashion and Retail.
In 2010, Forever 21 entered India with a Middle East-based group Sharaf Retail, but could open just one store in Delhi. In 2013, the Los Angeles-based fashion brand struck a partnership with DLF Brands to open 40-50 stores in five years in India, but the plans hit a roadblock once again. Many foreign retailers, including Sephora, UK's Debenhams, Next and luxury brands such as Armani have changed their local partners to accelerate growth and expansion in a key growth market like India.
"Many international brands did not do sufficient due diligence on financial and retail management capabilities of their potential partners. Over time, some of these Indian partners could neither invest sufficiently in the business nor get the right managerial talent to manage the brand in India. Also, a bunch of international brands, especially those who qualify for single-brand retailing, are now sufficiently confident to invest in India and run the Indian business themselves," said Arvind Singhal, chairman of retail consulting firm Technopak Advisors.