The British footwear brand Clarks has announced its decision to withdraw from the Indian market, ending its two-year partnership with Reliance Retail. Clarks prepares to close all 32 of its exclusive stores across major cities, including New Delhi, Mumbai, Bengaluru, Lucknow, Hyderabad, and Chennai.
The joint venture between Clarks and Reliance Retail, known as Clarks Reliance Footwear Pvt Ltd, has come to an abrupt halt due to unresolved disagreements over various aspects of their partnership. This has been confirmed by multiple sources within the retail sector who have disclosed that the decision to part ways was made after extensive deliberations failed to align the two companies on key operational terms.
Mall operators across India have started to notice the closures, with several of Clarks’ stores already shutting their doors or in the process of doing so. This move is seen as part of Clarks’ strategy to “exit” the Indian market for now, as per an insider familiar with the situation.
Despite the current closures, there are whispers within the industry that Clarks may not be saying goodbye to India for good. Some suggest the company is considering a return under a new structure. A source indicated that Clarks might explore the possibility of re-entering the Indian market as a fully-owned subsidiary. Indian laws permit 100% foreign ownership in single-brand retail, allowing companies the flexibility to operate standalone stores, engage in e-commerce, and establish franchise operations, as long as certain conditions are met. This model has been successfully adopted by international brands such as Apple, H&M, Uniqlo, Decathlon, and Ikea.
India’s single-brand retail policy requires that companies sourcing more than 51% of their products through foreign direct investment must purchase a significant portion of their products locally. This rule has encouraged many global brands to invest in the Indian market with a long-term view, but it also presents certain operational challenges that companies must navigate.
Clarks initially entered the Indian market in 2009 through a partnership with Kishore Biyani’s Future Group, forming Clarks Future Footwear Ltd. However, following Future Group’s financial struggles, the partnership was transitioned to Reliance Brands in 2022. With the current termination of this partnership, Clarks will be reassessing its strategy in one of the world’s largest and fastest-growing retail markets.