VF Corp. has taken full control of its business in India with the acquisition of the minority stake in its joint venture it didn’t already own.
“Our business in India is strong, and now is the time to assume full ownership,” said Eric Wiseman, VF’s chairman, president and chief executive officer. “Anchored by our Lee and Wrangler brands, the Indian market will provide a robust platform for future growth in the Asia-Pacific region.”
VF owned 60 percent of the venture through its VF Mauritius subsidiary, with Arvind Ltd. holding the rest. VF said Wednesday it paid $52.3 million for the remaining 40 percent. Arvind said separately it would use proceeds from the sale to pay down debt.
The joint venture, VF Arvind Brands Private Ltd., was formed in 2006 to market VF’s Nautica and Kipling brands in addition to its two largest jeans labels.
Aidan O’Meara, president of VF Asia, said that he didn’t expect any impact on jobs or changes in operations as a result of the change in ownership. He described the business in India as “fast-growing and profitable” and said he expected a continuation of the “strong working relationship” VF has had with Arvind.
During the Oct. 24 conference call to discuss VF’s third-quarter results, Karl Heinz Salzburger, president of VF International, noted that revenues in India during the three months increased 58 percent, “fueled by continued growth in our jeans business there. We’ve maintained an aggressive store opening plan and are on track to expand our Asia store base by 25 percent this year, with 530 new doors in China and 125 in India.”
Arvind is a vertically integrated manufacturer and marketer of apparel and textile products with diverse retail holdings, including value retailer Megamart, and brand licenses based in Ahmedabad, India.
In the fiscal year ended March 31, it had net income of 1.35 billion rupees, or $29.5 million at average exchange for the period, on revenues of 27.26 billion rupees, or $596.9 million. It holds licenses from PVH Corp. for the Izod brand in India and the Arrow brand in India and other markets. PVH’s Tommy Hilfiger unit bought out Arvind’s 50 percent stake in their joint venture in September.
Through the nine months ended Sept. 30, net income attributable to VF hit $630.8 million, or $5.69 a diluted share, on total revenues of $6.55 billion.
A new name for the India venture, now a wholly owned subsidiary, has yet to be determined.