Massimo Dutti likely to soon enter India

Zara Holdings, a subsidiary of Spanish company Inditex, is to get sanction to open Massimo Dutti stores in India from Foreign Investment Promotion Board (FIPB) next week.

FIPB, in June 2012, rejected Zara’s proposal to set up a 51:49 joint venture with Tata’s Trent, citing the company has violated FDI rule issued by Department of Industrial Policy and Promotion (DIPP). According to the rule, the investment has to be made by the owner of the brand.

Contrary to rule, Massimo Dutti is not owned by Zara Holdings but by Inditex, which also owns Zara brand.

However, the government has eased the rules of FDI in single-brand retail including the brand ownership requirement.

The new rule says the investor should have a legally tenable license agreement with the owner of the brand.

Should FIPB approve the proposal, Massimo Dutti will be the second Inditex-owned brand to operate in India after Zara, which has stores in Delhi, Mumbai, Bangalore and Pune.

Massimo Dutti was established in 1985 and was acquired by Inditex in 1991. It has more than 667 stores in over 64 countries.

While created as men’s clothing, Massimo Dutti diversified its offers to include fashion for women and children, as well as fragrances.

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