RIL gets fashion bouquet of 20 global brands via Iconix JV

Buys 50% In Local Ops of Ed Hardy & Mossimo Owner

Mumbai: Mukesh Ambaniowned Reliance Brands has struck an equal joint venture with Nasdaq-listed Iconix Brand Group acquiring the ownership and management rights of 20 international lifestyle brands for India. These brands—including names like Ed Hardy, Mossimo, London Fog, Ecko and Candie's—operate mostly in fashion apparel, home decor and electronics with combined retail revenue of $12 billion globally. 

    The deal provides Ambani significant heft in India's expanding lifestyle retail industry, and this is possibly the biggest investment in fashion by a large Indian corporate after Aditya Birla's acquisition of Madura Garments more than a decade ago. 
    Reliance Brands will buy 50% stake in Iconix India, a newly created subsidiary of the US parent founded by Neil Cole, a brother of the American designer Kenneth Cole. Ambani, the richest Indian with an estimated wealth of $27 billion, may use Iconix JV to acquire or invest behind Indian fashion brands. Similarly, Iconix will transfer the Indian ownership of all future global acquisitions to the new JV. 
    "The India ownership of the brands is vested with the joint venture company for perpetuity. We paid a fairly significant upfront amount to purchase the stake and the rights," Darshan Mehta, CEO, Reliance Brands, told TOI. Some other prominent brands that are part of the JV include Mudd, Candie's Rocawear, Rampage, Danskin, Charisma, Sharper Image. Iconix also has joint ownership of seven global brands, including Material Girl (with singer Madonna), which will become part of the JV in due course. 
    The deal-making with Reliance is part of Iconix Group's aggressive push into growth markets like India and China, where they forged a JV with fashion tycoon and former owner of Tommy Hilfiger, Silas Chau. Iconix chairman Neil Cole, who built a fashion business through acquisitions, said he was open to brand buyouts in growth markets like India. "We are in talks to buy a brand in Brazil, and could look for similar opportunities in markets like India," he said from New York over phone. 
    Iconix India will license the brands to local retailers in return for royalty payments. The JV will keep the brand management, marketing and business development duties for all the brands. "We plan to build exclusive long term licensing deals with local retailers for each of these brands. The retailer will manage the stores, inventory and the operations," Mehta said. 
    Mohan Mahajan, partner at consulting firm Mahajan & Aibara, said acquiring rights of well-known global brands is one of the easier ways to build a retail business, as opposed to developing a local brand. Indian conglomerate Aditya Birla acquired Madura Garments, the branded apparel brands of Coats Plc, to enter the fashion business in 1999. More recently, RPG Enterprises bought the brand rights of Ceat from Italian tyre maker Pirelli. 
ICONIC TIE-UP 
Deal with Nasdaq-listed Iconix Brand gets RIL ownership & management of 20 international lifestyle brands for India 
Brands — including London Fog, Ecko and Candie's — are mostly in fashion apparel, home decor & electronics, with combined global retail revenue of $12bn 
Mukesh Ambani, the richest Indian with an estimated $27bn wealth, may use Iconix JV to acquire Indian fashion brands 
Possibly biggest fashion deal by a large Indian corporate after Aditya Birla's acquisition of Madura Garments more than a decade ago 
RIL, Russia's Sibur ink $450m deal 
Mumbai: RIL has announced a joint venture with Russian petrochemicals giant Sibur for production of butyl rubber in Jamnagar, Gujarat, with a combined investment of $450 million (about Rs 2,250 crore). The JV would be named Reliance Sibur Elastomers and RIL would have a 74.9% stake, with Sibur owning the rest. AGENCIES

PM’s panel sees 7.5% GDP growth?

New Delhi: The Prime Minister's Economic Advisory Council (PMEAC) is expected to project a GDP growth rate of 7.5% for 2012-13 due to various challenges confronting the economy. For the current fiscal, it is expected to keep it at 7%, a shade above the Central Statistics Office's (CSO) estimate of 6.9%. But, government officials say PMEAC is likely to flag the concerns explicitly when it unveils its economic outlook on Wednesday. 

    CSO's 6.9% projection is the slowest pace of growth since the 2008 global financial crisis, far below the 9% growth rate forecasted in Budget 2011-12. 
    The economy has slowed due to a combination of factors, which include high interest rates, stubborn inflation, sharp increase in input prices and the global economic slowdown. 
    The PMEAC's estimate shows that key policymakers would prefer to keep the projection modest and not be too bullish despite signs of some improvement in the economy. The stock market has revived, while the rupee has stabilized after being the worst performing currency last year. After last year's experience, North Block too is expected to be conservative, while assuming the growth rate for its 2010-13 Budget numbers. 
    The slowdown in the economy and the industrial sector has put most of the 2011-12 Budget numbers in doubt. The government is unlikely to talk 8%-9% growth, considering the challenges in the conomy. 
    Global crude and commodity prices are a concern, while the sovereign debt problems in the Eurozone and the US are yet to be fully fixed. 
    The PM's council is likely to project that inflation, as measured by the wholesale price index, is expected to ease to around 7% by Marchend, similar to RBI's assessment. Inflation has remained a key policy challenge for the government for the past two years, prompting RBI to raise interest rates 13 times since March 2010 to calm stubborn price pressures. While food inflation has eased significantly, bringing relief, manufactured product inflation still remains a worry. 
    The PMEAC is also expected to discuss the issue of fiscal consolidation and the need to repair public finances to boost confidence. The government has said it would be difficult to meet the fiscal deficit target of 4.6% of GDP for the current fiscal year. Officials and economists say the fiscal deficit for the current fiscal is expected to be around 5.2%-5.5% of GDP. Rising spending commitments, sluggish tax revenues and expanding food and fuel subsidies have hurt the government's plan to rein in the deficit. The RBI has also urged the government to unveil a credible fiscal consolidation roadmap to help it ease interest rates. 
GDP to grow by 7.7% in 2012-13: CMIE 
Chennai:India's gross domestic product (GDP) is set to grow by 7.7% in 2012-13 on the back of lower headline inflation and strong capital inflows into the country, economic think tank Centre for Monitoring Indian Economy (CMIE) said in its latest bulletin on Economic Intelligence Service. GDP is a macroeconomic measure of the value of output economy adjusted for price changes (that is, inflation or deflation). Real GDP is expected to grow by 7.7% in 2012-13. This will be an improvement over the 7% growth projected for 2011-12. "Though the global outlook remains uncertain, domestic factors are likely to be more favourable in 2012-13 than they were in 2011-12," CMIE said in its report. TNN