It is already working in partnership with seven international brands including Giorgio Armani and Salvatore Ferragamo. It plans to tie up with over a dozen more global brands in the next five years with an investment of Rs. 10 billion ($200 million). It plans the funding through a mix of equity, debt financing and appointing franchisees.
The expansion would be concentrated in metros such as Delhi, Mumbai, Hyderabad and Chennai in the first phase according to the company communiqué. It already has over a dozen stores marketing these brands. The company plans to open at least 100 stores by the end of 2010.
Last week it entered into a franchisee agreement with Donna Karan New York (DKNY), a part of the luxury goods maker LVMH. Donna Karan stores will require around Rs. 650 millon in the next five years for the 28 stores it plans to open. The first three stores, including a DKNY ready-to-wear and two DKNY accessories outlets, would be opened in Delhi next month. The current plans are based on paring down by 25% their original plans due to the ongoing recession.
According to retail experts, the yet-untapped market for luxury goods is attracting global players to India. But most will tread cautiously during the current downturn. “India is still attractive, given the saturation in western markets. That is why international brands are looking at India, China and other South East Asian markets. But, if they planned to open 20 stores a couple of years ago, they will open around five stores in the current scenario,’’ reportedly said Hemant Kalbag, partner and vice-president, AT Kearney India, a business consultancy firm.
“The luxury brands market will continue to be a niche market in Indian metros and they will not be able to penetrate in India as deeply as they have done in the US, Europe and other developed countries,’’ he added. |