The UK footwear brand may, however, consider restructuring its India business and operate in the country as a single-brand retailer
Reliance Retail and UK-based footwear company Clarks have terminated their two-year-old joint venture amid major differences over various terms of their ongoing partnership, three people familiar with the development said.
As a result, Clarks is shutting down all its India stores, which one of the sources termed as the UK footwear brand’s “exit strategy”.
Clarks Reliance Footwear Pvt Ltd, the India JV, operated 32 exclusive Clarks-branded brick-and-mortar stores in India in various cities including New Delhi, Mumbai, Bengaluru, Lucknow, Hyderabad, Chennai among other cities, according to the UK company’s website.
Half a dozen mall owners confirmed the new development to IndiaRetailing. Some said Clarks has either shut stores in their shopping centres or is in the process of shuttering the outlets.
However, a second source said Clarks could restructure its India business and come in a new avatar—that of a fully-owned India subsidiary. India allows 100% overseas ownership in a single-brand retail business, where companies are allowed to sell multiple products, albeit under a single brand name such as Apple, Puma or Marks & Spencer.
A global spokesperson for Clarks declined to comment. “We won’t be commenting on this situation,” the Clarks spokesperson said in an email response. Reliance Brands, the Reliance Retail unit that is the joint venture partner with Clarks, did not respond to IndiaRetailing’s request for comment.
A host of global bigwigs including Apple Inc., Hennes & Mauritz (H&M), Uniqlo, Decathlon, and Ikea among other global companies have taken advantage of the single brand route where brands are allowed to undertake all types of retailing, from exclusive stores and e-commerce business to franchisees or wholesale under a unified licence. However, single brand licences come with some riders such as companies opting for more than 51% foreign investment must source almost one-third of the products they sell in India from within the country.
Somerset, England-based Clarks entered India in 2009 as Clarks Future Footwear Ltd., a joint venture between Kishore Biyani-led Future Group and the UK company. Clarks subsequently changed its partnership in favour of Reliance Brands in 2022 amid a financial crunch the Biyani group was facing.
“Clarks owners were not happy with the way things were going with Reliance,” a third person aware of the development said. “Clarks owners were also uncomfortable with the terms with Reliance. So, they decided to terminate the partnership,” the person said.
