Levi Strauss Seeks Nod For Direct Retail

Levi Strauss Seeks Nod For Direct Retail

Levi Strauss & Co, the maker of the popular Levi's denim jeans, has sought the government's permission for converting its existing local wholesale entities into retail, joining a list of foreign brands that are seeking to gain from policy liberalisation in Asia's No. 3 economy. The US-headquartered company had, on April 11, filed an application with the Department of Industrial Policy & Promotion (DIPP), the nodal agency for foreign direct investment in India, seeking approval for its existing wholesale entities to engage in direct retailing and ecommerce, according to the agency's website. Several apparel and casual wear brands such as Pepe Jeans, Adidas and Puma have already applied for similar permissions. While Pepe is looking at setting up large format, company-owned stores, Puma plans to operate its own ecommerce portal.

Although Indian regulations allowed single-brand retailers to set up their own stores, such companies had to set up wholesale subsidiaries to supply to their chain of franchisees. That made things cumbersome as companies had to set up separate entities for retail and wholesale, with different warehousing, inventory and accounting. In November 2015, for the first time the government relaxed the rules for FDI in retail, permitting manufacturers to sell their products through wholesale, retail and ecommerce channel as well. "It has been decided that a manufacturer will be permitted to sell its product through wholesale and/or retail, including through e-commerce without government approval," the DIPP said at the time. According to retailers, the policy change will help streamline business operations by bringing efficiency in supply chain, inventory management, sourcing and generating employment in retail industry.