Mukesh Ambani led Reliance Retail is inching towards signing in as the new India franchisee US based fashion brand Gap Inc. According to media reports, Reliance Retail has been in talks with Gap for months now.
After being the front runner for months, Reliance Industries’ retail arm is likely to clinch the deal ahead of Flipkart backed Myntra, which was also in talks with the fashion brand.
According to the sources familiar to the matter, Reliance Retail is likely to get a huge concession of manufacturing 100% of all Gap products to be sold in India.
Earlier, Arvind Fashion had the franchisee, which could only produce 70% of the products locally. Gap has been scouting for an India partner for more than a year, after it terminated its deal with Arvind Fashion in the previous year.
However, Gap Inc refused to comment anything on the matter, whereas Reliance Group did not comment anything.
Despite constant efforts like closing and pruning store sizes and increasing local sourcing for the brands in India, Arvind Fashions failed to turn Gap’s India business profitable.
Recently, the Indian apparel retail business has intensified further in India, ever since the entry of global players like Zara, H&M and Japan’s Uniqlo, disrupting the markets.
Gap is a household brand in the US but in India it is still a premium brand, which is out of the pockets for many potential buyers.
Wrenching Covid-19 pandemic wrecked havoc on the company’s business as its store’s were shut for a large part of year in the wake of spreading virus, which lead to nationwide lockdown. Gap contributed less than 5% to the Arvind’s revenue.
Reliance Retail-owned online fashion platform Ajio already sells almost the entire collection for men, women and kids from Gap and is one of the largest stockists on Ajio.