US clothing retail chain Forever 21 is planning to expand in India again. After making a foray into the Indian market in 2010 with just one store and partner Sharaf Retail, Forever 21 is now all set to tackle the Indian market on a larger scalewith a new partner, more stores and an initial investment of 50 million dollars.
DLF Brands is Forever 21’s chosen partner and 51:49 majority stakeholder. The brand is planning to open 40 to 50 stores in the next five years and will reduce its entry-level prices by over 20 percent to woe Indian consumers.
A fresh start for Forever 21 with DLF Brands
“Look at the population of both India and China, it’s huge... and... young too. This is a big opportunity. We hope to add 300-500 stores in Asia in the next five to seven years,” said Do Won Chang, Founder and Chief Executive of Forever 21 at the launch of the second flagship store in Delhi on Friday. Though he is optimistic about the brand’s chances in India (and Asia on a broader scale), he knows that timing is everything. “You can never be too early or too late with fashion, you have to be always on time,” he advises.
Slashing prices and getting the right merchandise in should work well for Forever 21 the second time around as the company has learned from earlier mistakes. “In India, Forever 21 aims to impress middle-class customers with offerings starting at just 180 rupees (3 dollars). We plan to open six to ten stores every year, where the store size would vary between 8,000 square feet and 20,000 square feet,” confirmed Timmy Sarna, managing director of DLF Brands.
Getting it right the second time around
Still, the Indian market can be tricky, especially for affordable international brands. “Such brands are actually positioned as premium brands in India even though the positioning might not be the same in their home countries. They hence target a niche audience and require premium locations in malls and high streets to grow,” commented Rachna Nath, leader, retail and consumer, at PriceWaterhouseCoopers.
DLF Brands’ strategy might help too. The company is the subsidiary of real estate giant DLF and has just been in the news for opening the first of ten planned multi-brand retail stores in Delhi on Thursday. Among Forever 21, DLF Brands has roped in international brands like Marks & Spencer, Uniqlo, Claire's, DKNY, Alcott, Boggi, Sunglass Hut, ELC and Mothercare after deciding to quit the luxury brands business, which it had been in since 2008.
Image: Forever 21 store / JG Marcelino