Disney Co In Talks With DLF Brands For India Retail Foray

Disney Co In Talks With DLF Brands For India Retail Foray

While the company plans to open a few large format flagship stores of 10,000 square feet, most of the outlets in India will average 1,000 sq ft of space to largely focus on apparel and toys.

The Walt Disney Co is in talks with India's DLF Brands to open stores in the country, hoping to cash in on the growing demand for branded kids clothing and accessories. Disney, the world's largest entertainment company, plans to operate such stores on a licensing and franchisee basis, industry analysts said. While the company plans to open a few large format flagship stores of 10,000 square feet, most of the outlets in India will average 1,000 sq ft of space to largely focus on apparel and toys. For its bigger stores, Disney will replicate global designs originally developed by Apple cofounder Steve Jobs when he had become its largest shareholder. DLF Brands chief executive officer Timmy Sarna said it already had a licensing deal with Walt Disney to sell children's clothing in India through retail formats that were part of the group such as Mothercare.

According to media reports, DLF Brands will initially open around 50 Disney stores in the first phase and is already scouting for locations. Globally, Disney is the largest retail character licensor with US$ 45 billion in retail sales. In India, it sells 3,000 stock keeping units (SKUs) of popular characters such as Mickey Mouse and Donald Duck in nearly a million stores and through online sites such as Amazon and Flipkart. While the children's apparel market in the country is pegged at Rs 95,000 crore and expanding at a compounded annual growth rate of about 20%, it is still largely controlled by unbranded units. "There is a huge shortage for branded merchandise in the kids' space. But the segment also offers enough opportunity, even in smaller towns, which we are looking to capitalise with our high fashion but affordable range," said J Suresh, managing director of Arvind Lifestyle, which has a franchisee arrangement with The Children's Place (TCP).

The retailer plans to have 32 stores and more than Rs 200 crore in sales in the next two years. The market has also seen consolidation. Mahindra Retail has acquired Babyoye while Hushbabies and Unamia.com have shut. Indian brands such as Weekender Kids, Catmoss, Gini & Jony and Lilliput have had to either close or scale down operations in the last decade, unable to sustain rapid expansion costs. However, global brands such as TCP, Pepe Jeans, French children's-wear brand Jacadi and Malaysian brand Poney have recently entered the country as economic growth and birth rates slow in developed markets.