Myntra to drive the wheels for Forever 21's retail chain in India

Flipkart-owned online fashion store Myntra is in advanced talks to control the local retail chain of Forever 21, the US fashion brand targeted at teens and young adults.

Under an exclusive partnership, the Indian company already sells Forever 21's products online in India. A deal to take over the 10 brick-and-mortar stores currently managed by a joint venture of Forever 21 and DLF Brands will mark Myntra's entry into offline retailing, which is becoming a global trend among ecommerce firms. Having an offline presence comforts the brands to de-risk their business from online-only focus.

Forever 21, which entered India half a decade ago had changed a partner already before partnering with DLF Brands. Though, it hasn't been able to scale up its business like global rivals such as Spanish brand Zara. While Zara's annual revenue was about Rs 720 crore in the fiscal year ended March 2015, for Forever 21, it was around Rs 250 crore.

Harminder Sahni, founder of retail consultancy firm Wazir Advisors, said that DLF isn't too keen to invest in such businesses anymore and wants to focus only on Mothercare, the British brand with which it has a tie-up in India.

Forever 21 wants to exit the joint venture and have a franchise operation in India. The talks are for Myntra to take over the chain, buying out both Forever 21 and DLF Brands. According to some sources aware of the event, handshakes have happened with Myntra and currently the documentation is happening.  Also, the Los Angeles-based fashion retailer had held talks with Reliance Retail and Arvind Brands in the past.

Myntra is exploring the possibilities of opening its branded offline stores as well. It is deliberating whether such outlets should sell products or function as a place where consumers can touch and feel the products. Myntra has been pondering about the idea of having its own brick-and-mortar stores in the past as well, but it has now gained momentum.

But Sahni of Wazir Advisors is unsure of its offline success. He said that it would be a tricky one for Myntra as they are trying to open exclusive stores for other brands while they have no experience of running stores, because running physical stores requires different skillsets.

Forever 21 entered India in 2011 through a franchise route with Dubai-based Sharaf Retail and the business failed to scale up for two years, prompting the Dubai company to close the lone store in New Delhi in early 2013. After the companies called off their franchise agreement, Forever 21 formed the joint venture with DLF Brands and opened ten stores in the National Capital Region, Mumbai, Pune, Bengaluru, Thane and Hyderabad.