PARIS — The French low-cost fashion retailer Kiabi on Wednesday unveiled an agreement to transform 100 stores run by fellow budget player Vêti into Kiabi franchises. Kiabi claims the deal would help it overtake competitor Carrefour to become the biggest mass clothing retailer in France.

This story first appeared in the May 14, 2009 issue of WWD. Subscribe Today.

Subject to approval by the French competition authority, the deal would increase Kiabi’s French doors to 299 and boost its sales by some 150 million euros, or $204.3 million at current exchange, upping market share in small and medium-sized towns where the chain isn’t present.

Offering women’s, men’s and children’s wear at prices as low as 1.99 euros, or $2.70, for a cotton top and 9.99 euros, or $13.60, for a pair of jeans, Kiabi seems to be resisting the economic downturn. With 257 stores, including 58 across Spain, Italy and Russia, the company increased its 2008 sales by 14 percent to 904.4 million euros, or $1.33 billion. Same-store business, meanwhile, inched ahead 1.2 percent.

With the Vêti deal, plus further franchises and its own stores, Kiabi plans to operate 510 units worldwide and to hit sales of 1.6 billion euros, or $2.18 billion, by 2010. The company, which is part of the Association Familiale Mulliez, whose holdings include the supermarket chain Auchan and fast-fashion chain Pimkie, said it is recruiting 1,500 employees this year.

Selling budget fashion for men, women and children, Vêti is part of the Mousquetaires group, which also owns supermarket chain Intermarché. Stores are run independently so each has the option to join the Kiabi network. The chain sold 188 million euros, or $276.6 million, of clothing in 2008 through 146 stores in France plus 18 in Portugal.