From shoes to watches, luxury biz witnesses headwinds, but chugs along



With customers dwindling at stores, the business in India seems to have witnessed a sort of a slowdown. However, that has not deterred many international of automobiles, watches, shoes, apparel and accessories from scouting for locations in the country and setting up stores, indicating that the prognosis is not so bad after all.


Consider the number of that have set up shop in India recently. A few months back, Berluti, a luxury leather brand owned by LVMH, launched a store in New Delhi. Then high-end watch-makers Officine Panerai and Franck Muller opened new stores in Mumbai’s Palladium Mall. Stefano Ricci, a super-premium men’s clothing brand from Italy, has also set up its second store in the country at Oberoi Hotel in New Delhi.


Rolls-Royce, perhaps the most luxurious auto brand in the world, has also launched the Cullinan, its first SUV, in India. Of course, its price tag of Rs 70 million may discourage most buyers. Earlier this year, Reliance Brands (RBL) became the largest luxury apparel brand operator in the country when it acquired and associated brands. In the world of art Tyeb Mehta’s painting “Kali” sold for $4 million, a record for the artist. And while art auction house Christie’s may have exited the country, Sotheby’s moved right in.


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Yamini Mehta of Sotheby’s says that though Tyeb Mehta commanded strong prices at their debut auction, art is only just starting here. “In the upper east side in New York, one will see $200 million in art in homes worth $10 million. In India, it’s the opposite.” She adds that the positives are that the lower market (Rs 5 million and less) is growing fast and though the upper end at Rs 50 million and more will always be rarefied, it’s the middle segment, between Rs 5 million and Rs 50 million, that needs to grow to boost sales. Even so, prices have jumped over the years with a few blue-chip artists driving up prices with “wall-power”.



Rolls Royce


Rolls-Royce has launched the Cullinan, its first SUV, in India. It is priced at about Rs 70 million



Despite a few notable high points, the market for remains weighed down by several factors, especially heavy import duties. Take automobiles, for example. says Yohan Poonawalla, president of Poonawalla Engineering Group, and someone who owns several Rolls-Royces, “Recent government policies have been penny-wise and pound-foolish because duties have been jacked up to the point where sales have come to a grinding halt.”


Poonawalla has a point. Duties on luxury automobiles have shot up to over 200 per cent for CBU (completed built up, fully imported) vehicles. In other words, a car that costs Rs 30 million sells for almost Rs 100 million with all the taxes factored in. Forex fluctuations have worked against their sales too. According to sources, only four were sold in India in the last one year as compared to 13 in 2017. Similarly, Volkswagen’s Bentley sold 21 units in 2018, down from 28 last year.


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Darshan Mehta, president and CEO, Reliance Brands Limited, says though sales were strong over 2016-17, business became sluggish some months after demonetisation. However, Mehta insists that sales have picked up over the last few months of 2018 and as a result, RBL saw 9 per cent growth in its top line as compared to 1 per cent last year.


Analysts say the branded apparel and shoe-ware segments are valued at approximately Rs 10 billion in annual sales. RBL runs Paul & Shark, Bottega Veneta, Ermenegildo Zegna and others. With the acquisition of rival luxury operator Genesis Brands, it now runs brands like Canali, Burberry and Jimmy Choo as well. RBL is prepping to set up two new malls in Mumbai’s Bandra Kurla Complex next year — Jio World Center for luxury brands and the Maker Maxity Mall for premium labels.


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Mehta says the game is now all about locating new customers and keeping tabs on them. “The luxury customer universe is about customers in the hundreds and thousands, not lakhs and millions,” he says. Which means that it will always be more and more about less and less, with sales and marketing channels getting more savvy in order to reach out to their customers.


That philosophy is best exemplified by which visited India recently to set up shop here. Sales and trade marketing manager Robert Bailey reveals that the luxury watchmaker retails 450 timepieces a year that start from 40,000 euros. “If we can find customers in India for even 10 per cent of our output, we will be delighted,” he says.

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