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Fabindia Looks to Expand Borders

The ethnicwear retailer is seeking to open between 20 and 50 stores outside India by 2015.

Fabindia is looking to markets in Southeast Asia and the Middle East to grow.

SINGAPORE — As Fabindia seeks to expand internationally, it is tweaking the strategy that has made it one of India’s leading ethnicwear retailers.

In India, where it operates about 160 stores, Fabindia is well known for being a sales platform that connects about 40,000 rural artisans, who make everything from handcrafted saris to table linens, with the country’s emerging middle class. This January, L Capital Asia, LVMH Moët Hennessy Louis Vuitton’s investment arm, purchased an 8 percent stake in the company for an undisclosed sum.

Though Fabindia is seeking to open between 20 and 50 stores outside India by 2015, most of its nine international stores are in countries with close links to India, such as Nepal and Mauritius. For its latest boutique in Singapore, which opened in October, Fabindia faces the challenge of selling itself to an audience largely foreign to the brand.

To attract customers new to Fabindia, Indigo Origins Pte Ltd., the Singapore franchisee, has revamped the presentation of wares in the roughly 850-square-foot store, which is located in Paragon mall on Orchard Road, Singapore’s main shopping thoroughfare.

Whereas much of the merchandise in Fabindia’s domestic stores are laid out in stacks, the samples here are mostly hung. “In India, people know what the fabrics feel like,” said Suman Aggarwal, one of Indigo’s directors. “But this is brand new to Southeast Asia, so people may need to feel the product in order to appreciate it.”

As it looks to grow, Fabindia is also working to develop more seasonal items.

“Traditionally, the product line has been for summer, but we’ve decided to ensure that we have a line that will be relevant in an international context,” said a senior L Capital Asia executive who works regularly with Fabindia.

According to the executive, Fabindia would be looking to new markets in Southeast Asia and the Middle East for future expansion. “Though all the intent is to diversify beyond them, we’re looking at markets with a concentrated Indian diaspora that can sustain the business,” the executive said. “Clearly, markets in [these two regions] are witnessing growth compared to relative saturation in more mature markets.”

Fabindia’s international arm has a stake of an undisclosed size in Indigo, which holds exclusive rights to retail the brand in Singapore. According to Deepak Mirpuri, an Indigo director, the company is in discussions with Fabindia to acquire rights to retail in neighboring Malaysia.

Though L Capital Asia is headquartered in Singapore and frequently uses the LVMH platform to help affiliated companies acquire retail space, Indigo had already made plans to set up in Singapore before the fund’s investment. Now, with L Capital’s help, it is looking to grow further.

“We absolutely appreciate the opportunity,” Mirpuri said. “A year on, you will see multiple stores here.”