Clarks footwear to continue with joint venture partner
With 100 per cent FDI being allowed in single-brand retail, international brands have been looking forward to buying out the balance stake of their respective JV partners.
In the past, footwear chains such as Pavers England have got the necessary clearance for 100 per cent FDI in single-brand retail.
S Ramprasad, CEO, Clarks Future Footwear, said, “India is the first company where Clarks has forged a JV and there is a long-term agreement with the Future group as we intend growing with the largest retailer in India.” Having completed nearly four years in the country, Clarks plans on adopting the franchise route to expand its retail network.
“Now that we have scale and an operating model, we will expand through franchises,” added Ramprasad. Today, Clarks has almost 50 company-owned stores and 20 new franchisees are expected to roped in by next year.
The company has no plans of lowering prices for the Indian market. Despite sourcing nearly 35 per cent of its footwear from the country, the brand is not in a position to drop prices to cater to the price-sensitive Indian consumer.
“Compared with the rest of the markets, Clarks has the lowest price in India. We have raised prices between 5 per cent and 8 per cent last year, and would not be willing to drop prices. Clarks is a mid-premium brand in the UK, and is not meant for those who cannot pay in excess of Rs 2,000 for the brand,” he said. In fact, the brand is almost 40 per cent cheaper in India compared to Hong Kong, and almost 10 per cent lower than the UK, depending on the local duties in each market.
India has been the sourcing hub for the brand for the past 20 years. Chennai-based Farida Group and Bangalore’s Sara Soles are some of the companies manufacturing for Clarks footwear.
“Just having a local sourcing hub is not enough to reduce prices. There are imports of raw material like leather and other labour costs that are involved. Despite the depreciating rupee, we have not passed on the entire burden to the consumer,” added Ramprasad.
The company hopes to break even next year.