By  on September 5, 2006

VF Corp. has entered into a joint venture with India's Arvind Mills Ltd. that will provide the American apparel giant with a platform to launch its portfolio of lifestyle brands in the world's second-most populous country.

According to a statement from Arvind, VF will pay $33 million for a 60 percent ownership in the new venture, VF Arvind Brands Private Ltd., which initially will handle design, marketing and distribution responsibilities for the Lee, Wrangler, Nautica, JanSport and Kipling brands. Those brands were previously handled through a licensing and distribution agreement with Arvind subsidiary Arvind Fashions.

"Arvind Mills and the management team that built our Lee and Wrangler brand business in India over the last decade have been great partners," Mackey McDonald, chairman and chief executive officer, said in a statement. "Extending our partnership with this joint venture is a logical evolution of our strong relationship."

Darshan Mehta has been named ceo of the venture, which will be based in Bangalore and employ 180 people. Mehta will report to Eric Wiseman, VF's president and chief operating officer, who has been named chairman. Previously, Mehta served as president of Arvind Brands.

Arvind launched Tommy Hilfiger in India through its nine freestanding stores in Delhi, Bangalore, Mumbai, Kolkota, Hyderabad and Chennai. Last month, Arvind introduced the Gant brand in the country. In addition, the firm has several homegrown brands such as Excalibur, Flying Machine, Ruggers, Bay Island and Newport. In May, the company said it planned to open the Arvind Design Lab, a design center and showroom for its U.S. customers, in late summer in SoHo in New York.

News of the latest joint venture came just after VF revealed the reorganization of its international management team with an eye toward increasing its overseas business to 30 percent of total revenues over the next three to five years. Karl Heinz Salzburger was named to the new post of president of Europe, Middle East, Africa and Asia, and indicated that the Chinese, Indian and Russian markets would be a focus of the company's expansion efforts. India's rising middle class and population of more than 1 billion make it particularly attractive.

"The branded apparel market in India is approximately $4.4 billion and continues to grow as consumers are becoming increasingly brand- and fashion-conscious," Mehta said in a statement.India already figures prominently in VF's international business. According to the company, the Lee, Wrangler, Nautica, JanSport and Kipling brands currently generate $40 million in wholesale volume in India. Those brands alone are expected to grow more than 25 percent per year. The joint venture also will allow the company to more easily introduce new brands into the market.

"Already, we're at $1.6 billion in revenue outside the U.S. As far as apparel companies go, that's pretty big," said Wiseman last week. "I look at China and India as important places to build the right brand foundation." VF reported $6.5 billion in revenues in 2005 and anticipates revenues growing 6 to 7 percent this year.

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