Clarks Future Footwear plans to double stores in India
The joint venture, which expects revenue to touch £20 million this fiscal, recently opened its 51st store in India. Andrew Martland, president (Asia-Pacific, Middle East and Africa) at Clarks, said the company will continue its joint venture in India despite the government allowing 100% foreign direct investment (FDI) in single-brand retail.
"The partnership with Future Group is the strongest we have anywhere in the world," Martland said from London in a phone interview to ET. "The FDI does encourage us to increase sourcing from India, which can potentially double in the near term, provided the government rationalises excise duty on premium footwear."
Clarks currently sources most of its footwear from China and Vietnam. It sources about five million pairs of leather shoes sourced from India. Martland said Clarks is working with the shoe manufacturers' association to push for rationalisation of 8% excise duty on footwear priced above Rs 1,000. In the 2014-15 Budget, the NDA government raised the limit for footwear exempt from excise duty to Rs 1,000 from Rs 500.
The industry body, however, says such products account for only a small part of the market as an additional 12-15% VAT, 2-5% octroi and local body taxes increases the prices of most footwear.
Martland said due to such high taxes, 30% of the Clarks shoes sold in India are locally manufactured while the balance are imported. "If the taxes are rationalised, we would increase our production in India and make it amongst one of the top sourcing markets," he said.
Clarks will continue with its existing store format in India, which involves stores with a selling area of about 1,000 sq ft.
At the same time, the company is expanding its accessories range that includes handbags, shoe care products, bags, wallets and belts, and betting on e-commerce through its own website as well as Flipkart, Myntra and Amazon.