Billabong International Ltd., Australia’s biggest surfwear maker, signed an exclusive distribution agreement with Arvind Ltd. to expand sales of its products into India.
The deal with the Arvind Lifestyle Brands Ltd. unit includes products sold through standalone outlets as well as department stores and other retailers, Ahmedabad, Gujarat-based Arvind said in a statement today. Billabong spokesman Chris Fogarty confirmed the agreement.
The pact gives Billabong access to Arvind’s national network in the world’s second-most populous nation as the surfwear maker seeks to revive earnings after last year posting its first loss since listing in 2000. The Indian company is already Tommy Hilfiger Corp.’s partner in the country and has licensing deals with labels including Gant, Mossimo and Geoffrey Beene.
“Arvind has licensing relationships with a number of international partners,” Phil Nicole, Billabong’s general manager for Asia, said in the statement. “We are therefore convinced that we have found in Arvind a great partner for Billabong as we seek to further grow our Asian operations.”
Arvind Lifestyle, which recently agreed to acquire the Indian franchise of Debenhams Plc, Next Plc and Nautica Apparel Inc., is adding international brands to its portfolio as consumer spending on apparel in India may grow to $60.4 billion by 2015 from $32.5 billion in 2009, according to estimates by A.M. Mindpower Solutions.
Billabong rose 2.2 percent to 93 Australian cents at the close of trading in Sydney. Arvind Ltd.’s shares rose as much as 1.7 percent in Mumbai trading today, and were up 0.8 percent to 90.70 rupees as of 12:19 p.m. India’s benchmark Sensitive Index fell 0.1 percent.
Arvind is targeting revenue of 50 billion rupees from sales of branded clothing in the next five years, of which 20 billion rupees would come through acquisitions, joint ventures and new brands, the company said in the statement.
India’s government in January removed a 51 percent limit on foreign ownership of retail stores selling a single brand, allowing companies such as Ikea and Gap Inc. to wholly own local ventures.