Reliance Brands, Iconix Brand Form Joint Venture For India

Reliance Brands Ltd., a unit of Indian conglomerate Reliance Industries Ltd. (500325.BY), said Wednesday it has formed a joint venture with Iconix Brand Group Inc. (ICON) to sell the U.S. company's brands such as Ed Hardy, Mossimo, London Fog and Ocean Pacific in India.

The development comes on the heels of the Indian government easing foreign investment rules for single-brand retailers, who have been allowed full ownership now versus a cap of 51% earlier.

However, some foreign retailers still prefer to come into India via tie-ups with local players as they don't want to go it alone in a new market.

Existing Iconix businesses in India with brands such as Mossimo will be rolled into the partnership, the companies said in a joint statement.

Iconix had signed a license agreement in January 2011 with Arvind Ltd. (500101.BY) for selling its Mossimo brand in India.

Iconix Chairman Neil Cole said partnering with Reliance is a next step in its global expansion strategy. It currently has similar partnerships in Greater China, Europe and Latin America.

The U.S. company, which licenses its brands to retailers and provides marketing and brand-management services, has a long-term aim of growing international revenue to a third of its total business. International markets contributed 14% of the company's revenue of $333 million in 2010.

For companies such as Iconix, getting greater access to the Indian retail market--estimated to be about $500 billion annually--is important at a time when the business environment is difficult in their home markets.

Foreign brands are gaining market share in India as an increasingly Westernized middle class in Asia's third-largest economy gets exposed to international fashion trends via the Internet and television.

The Iconix joint venture will be based in Mumbai and the partnership is subject to regulatory approvals.

Reliance Brands already has brand partnerships with others such as Diesel, Ermenegildo Zegna, Hamleys PLC and Steven Madden Ltd.

-By Rumman Ahmed, Dow Jones Newswires; 91-9845104173; rumman.ahmed@dowjones.com

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