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Moumita Bakshi Chatterjee
Bindu D. Menon

New Delhi, Nov. 24 The Foreign Investment Promotion Board (FIPB) has recommended approving Gucci’s plans to pick-up 51 per cent stake in Luxury Goods Retail Ltd, under single brand retail.

While the FIPB is learnt to have recommended the proposal after deliberation at its November 20 meeting, the Finance Minister is yet to take a final view, Government sources said. It is only after Finance Minister’s nod that FDI proposals are accorded a final clearance.

The proposal involves Gucci acquiring majority holding in its Indian franchisee, Luxury Goods Retail. At present, Luxury Goods Retail sells products under the Gucci brand, in India.

Gucci India had entered into a franchise pact with luxury retailer Murjani Group in 2006. But the pact was terminated earlier this year and replaced with a new franchisee agreement. This new agreement was inked with investment banker and former partner of Ambit Group Mr Ashok Wadhwa’s Luxury Goods Retail.

Gucci is now in the process of transforming it into a 51:49 venture. The FDI inflow under the current proposal is to the extent of Rs 1.04 crore, sources said.

Gucci products are sold in over 50 countries through stores owned by Gucci Group and also through franchisee pacts. The House of Gucci, better known as Gucci, is an Italian fashion and leather goods label, founded by Guccio Gucci in 1921. It manufactures and distributes a range of fashion and leather goods such as handbags, luggage, shoes, ready-to-wear, watches and jewellery.

More Stories on : Retailing | Foreign Direct Investment

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